On 1st Jan, 2010, Green Products Ltd, Issued, Debentures/Bonds of Rs. 5,00,000 redeemable at par at the end of 6 years, and it was resolved that a Sinking Fund should be formed and invested in tax free securities. 

An annual installment of Rs. 75380.95 invested at the rate of 4% shall be equal to Rs. 5,00,000/- approximately at the end of 6 years. Assuming that the interest received on the investment was immediately invested and that the investment was realized at a Profit of Rs. 1000 at the end. 

You are required to give journal entries and draw up the necessary ledger accounts for 6 years.

Answer rating: 100% (QA)

1 Journal entries Note Coupoun interest of DebentureBond is not available so coupoun payment entries are not recorded Rupees Date Particulars Debit Credit Jan 01 2010 Bank Ac Dr 500000 To Debenturebon... View the full answer