A company had issued - 20,000,8% partly convertible debentures of 100 each on April, 1,2023. The debentures are due for redemption on June, 1,2024.…

Particulars Number of debentures Number of convertible Debenture issued 20,000 Converted into equity shares 30% Number of debentures to be converted (30% of20,000) 6,000 Value per Debenture 100 Equity shares of 10each issued on conversion [₹ 6,000 x 100/20] 30,000 shares Journal Entries Date Particulars Amount (₹) Dr. Amount (₹) Cr. 1-6-24 8% Debentures Dr. Premium on Redemption of Debentures Dr. To Debenture holders A/c (Being amount payable to debenture holders on redemption) 20,000,00 70,000 20,70,000 *Debenture holders A/c Dr. To Equity Share Capital To Securities Premium (Being - 30,000 equity shares issued on conversion) 6,00,000 3,00,000 3,00,000 *Debenture holders A/c Dr. To Bank A/c (Being amount paid to debenture holders) 14,70,000 14,70,000 Profit and Loss A/c Dr. To Premium on redemption of Debentures (Being premium on redemption of debentures transferred to Profit and Loss A/c) 70,000 70,000 Debenture Redemption Reserve A/c Dr. To General Reserve (Being DRR transferred to General Reserve) 1,40,000 1,40,000 Bank A/c Dr. To DRR Investment A/c (Being DRR Investment realised) 2,10,000 2,10,000 *Alternatively, a combined entry can also be passed for the entries marked in ”* ”. In that case, the entry will be - Particulars Amount (₹) Dr. Amount (₹) Cr. Debenture holders A/c Dr. To Bank A/c To Equity Share Capital To Securities Premium (Being amount paid to debenture holders on redemption and - 30,000 equity shares issued on conversion) 20,70,000 14,70,000 3,00,000 3,00,000 Note: In case of partly convertible debentures, DRR shall be created in respect of non-convertible portion of debenture issue. Amount of DRR created at the time of issue is10% of 14,00,000 = 1,40,000 Amount of DRR investment should be15% of14,00,000 = 2,10,000