450 To Interest on D.R.R. Investments 1,000 Sep. 1 By Debenture Interest Alc By Own Deb. (D.R.R.) Alc Dec.31 By Balance old 38,500 on 7,200 Sep. 30 TO Interest D.R.R. Investments 3,000 1,03,880 1,03,880 2013 Jan. 1 To Balance bid 7,200 5 6% Debentures Account 2012 2012 Dec. 31 To Own Deb. (D.R.R.) 45,000 Jan. 1 By Balance bld 4.67,000 Alc Dec 31 To Balance cld 4.22.000 4.67,000 4.67,000 Notes: (1) The amount to be invested on Jan. 1. 2012 is 57,680; 60,000,6% State Loan has been purchased. Interest till date on this loan is 900; this has been debited to the interest on D.R.R. investments Account and the balance; 56,780, debited to the D.R.R. Investments Account. (2) The total amount realised by sale of 40,000 State loan on Sept. 1, 2012 is 39,000 i.e., 38,000 plus 1,000 (interest for 5 months on 40,000). (3) 339,000 is utilised for purchase of 45,000 own debentures, the interest till date is 3450 - debited to Debenture Interest Account, 38,550 is debited to Own Debentures (D.R.R.) Account Illustration 5 MM Ltd. had the following among their ledger opening balances on January 1, 2012: 11% Debentures A/c (2000 issue) 50,00,000 Debenture Redemption Reserve A/C 45,00,000 13.5% Debentures in XX Ltd. A/c (Face Value 720,00,000) 19,50,000 Own Debentures A/c (Face value 220,00,000) 18,50.000 As 31st December, 2012 was the date for redemption of the 2000 debentures, the company started buying own debentures and made the following purchases in the open market : 1-2-2012 2,000 debentures at 798 cum-interest. 1-6-2012 2,000 debentures at 799 ex-interest. Half yearly interest is due on the debentures on the 30th June and 31st December in the case of both the companies. On 31st December, 2012, the debentures in XX Ltd. were sold for 795 each ex-interest. On that date, the outstanding debentures of MM Ltd. were redeemed by payment and by cancellation Show the entries in the following ledger accounts of MM Ltd. during 2012 (a) Debenture Redemption Reserve A/C (b) Own Debentures Ac The face value of a debenture was 100 (Round off calculations to the nearest rupee.)