Q# 1. 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.

Q# 1. 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.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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