Redemption of Debentures|CUET|Most Important Question

(Transfer of DRR to General Reserve on redemption of all the debentures). On 1st April 2017, Base Ltd. Issued Rs. 40,00,000, 10% Debentures of Rs. 100 each at a premium of 5% and redeemable at a premium of 10% in equal annual drawing by draw of lots in 2 years starting from 31 st March, 2018. It also decided to transfer amount of DRR to General Reserve after redemption of all the debentures, at the end of that Financial Year. Pass the necessary Journal entries during the years of Issue and Redemption of Debentures. Ignore interest paid on Debentures and interest received in Debentures Redemption Investment.

(Redemption of Debentures in case of Banking Company). Bank of India Ltd. Has outstanding 1,00,000, 10% Debentures of Rs. 10 each issued in 2015 due for redemption 30th June, 2019. How much amount of Debentures Redemption Reserve should be created before the redemption of debentures begins and also how much amount should it invest in specified securities ? Pass Journal entries at the time of redemption of debentures.