Following information is given 'by Mr. Happy (stock broker) relating to his holding in 10% Government Bonds: Opening Balance as on 1st April, 25 was…

In the Books of Mr. Happy 10% Government Bonds (Investment) Account Particulars Nominal Value Interest Principal Particulars Nominal Value Interest Principal 2025-26 ₹ ₹ ₹ 2025-26 ₹ ₹ ₹ April 1 To Balance b/d (W.N.1) 5,00,000 12,500 4,85,000 June. 30 By Bank A/c (W.N.3) 28,000 June 1 To Bank A/c (W.N.2) 60,000 2,500 56,900 Oct. 1 By Bank A/c (W.N.4) 2,50,000 6,250 2,46,250 Aug. 1 To Bank A/c 2,40,000 2,34,000 Dec.31 By Bank A/c (W.N.6) 27,500 Oct. 1 To P&L A/c (W.N.5) 3,750 Jan. 1 By Bank A/c (W.N.7) 3,00,000 2,97,000 Jan. 1 To P&L A/c (b.f.) (W.N.8) 7,083 March 31 By Balance c/d (W.N. 9 & W.N.10) 2,50,000 6,250 2,43,483 March 31 To P&L A/c (Transfer) 51,000 8,00,000 68,000 7,86,733 8,00,000 68,000 7,86,733 Working Notes: Interest element in opening balance of bonds = 5,00,000 x 10% x 3/12 = 12,500Purchase of bonds on 1.6.25 Interest element in purchase of bonds = 600 x 100 x 10% x 5/12 = 2,500 Investment element in purchase of bonds = (600 X 99) = 59,400 -2,500 = 56,900Interest for half-year ended 30.6.25 = 5,60,000 x 10% x 6/12 = 28,000Sale of bonds on 1.10.2025 Interest element = 2,500 x 100 x 10% x 3/12 = 6,250 Investment element = 2,500 x 98.50 = 2,46,250Profit on sale of bonds on 1.10.25 Cost of bonds = (4,85,000/5,000 X 2,500) = 2,42,500 Sale proceeds = 2,46,250 Profit element = 3,750Interest for half-year ended 31 December 2025 = 5,500 x 100 x 10% x 6/12 = 27,500Sale of bonds on Jan.1,26 Interest element = 0 (Nil) Investment element = 3000 x 99 = 2,97,000Profit on sale of bonds on Jan 1, 26 Cost of bonds = [2,42,500+56,900X5/6] = 2,42,500 + 47,417 = 2,89,917 Sale proceeds = 2,97,000 Profit element = 7,083Closing value of investment Calculation of closing balance: Nominal value ₹ Bonds in hand remained in hand on 1.4.25 ... Purchased on 1st June,25 10,000 9,483 Purchased on 1st August,25 2,40,000 2,34,000 2,50,000 2,43,483 Interest element in closing balance of bonds = 2,500 x 100 x 10% x 3/12 = 6,250.