Pass necessary Journal Entries for the following transactions in the books of Sudarshan Ltd:
(i) Redeemed 750, 12% Debentures of Rs 75 each by converting into Equity Shares of Rs 100 each. The Equity Shares were issued at a discount of 10%.
(ii) Converted 550, 12% Debentures of Rs 1,000 each into New 13% Debentures of Rs 100 each. The New Debentures were issued at a premium of 10%.

Journal entries

 Date Particulars LF Debit (Rs) Credit(Rs) (i)                   (ii) 12% debentures a/c                      Dr                    To debenture holders a/c (being 750 debentures @ Rs 75 each redeemed to debenture holders) 56,250       56,250 6250       5,50,000       5,50,000 56,250         62500       5,50,000       5,00,000   50,000 Debenture holders a/c              Dr Discount on issue of shares a/c   Dr                 To equity share capital a/c (being 12% debentures converted to equity shares of Rs 100 each issued at a discount of 10%) 12% debentures a/c                    Dr                To debenture holders a/c (being 12% debentures due to debenture holders) Debentures holders a/c                    Dr                To 13% debentures a/c               To premium on issue of                   debenture a/c (being 550, 12% debentures of Rs 1000 each converted to 13% debentures of rs 100 each at 10% premium)

Working note:
(i) Amount due to debenture holders 56250 i.e.(750*75)
Number of equity shares to be issued at 10% discount =56250/90 =625 shares
Discount on issue of shares =625*10=6250

(ii) 550, 12% debentures @ 1000 each =5,50,000
Number of 13% debentures to be issued =5,50,000/110= 5000 shares
Premium on issue of debentures = 5000*10=50,000