Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Hindustan Ltd. issued 50,000, 6% debentures of Rs. 100 each on 1st January 2011. The debentures are redeemable by the creation of a sinking fund.

Hindustan Ltd. issued 50,000, 6% debentures of Rs. 100 each on 1st January 2011. The debentures are redeemable by the creation of a sinking fund. The company had the right to call upon the trustees to apply the sinking fund moneys in purchasing own debentures, if available, below par. The following information is given :

The annual appropriation is Rs. 50,000. (b) Sinking fund balance as on 1st January, 2016 was Rs. 1,81,942 represented by 6% State Loan at cost of Rs.

74,262 (face value Rs. 80,000) and Sinking Fund cash Rs. 7,680. This cash balance together with the annual appropriation of Rs. 50,000 was invested in 6% State Loan. The loan bonds which were purchased cum-interest had a face value of Rs. 60,000.

(c) On 1st September 2016 sold the State Loan of the face value ~ 40,000 out of loan held on 1st January 2016 for Rs. 38,000 (ex-interest) and the proceeds were applied in purchasing own debentures (face value Rs. 45,000) ex-interest.

(d) The debentures purchased are cancelled on 31st December.

(e) Interest on State Loans is received on 31st March and 30th September.

(f) Interest on debentures is paid on 30th June and 31st December.

(g) Debentures outstanding as on 1st January, 2016 were Rs. 4,67,000.

Make Ledger Entries in the books of the company to give effect to the above.

Step by Step Solution

3.47 Rating (157 Votes )

There are 3 Steps involved in it

Step: 1

In the question Balances as on 1st January2016 has been Given which m... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Finite Mathematics and Its Applications

Authors: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair

12th edition

978-0134768588, 9780134437767, 134768582, 134437764, 978-0134768632

More Books

Students also viewed these Accounting questions

Question

What is meant by disparity in sentencing?

Answered: 1 week ago