Question - 15

On 1st April, 2011 X Ltd. issued 5,000, 8% debentures of Rs. 100 each repayable at par at the end of the third year. it has been decided to set up a cumulative sinking fund for the purpose of their redemption. The investments are expected to realize 4% net. The sinking fund table shows that Rs. 0.31411 amounts to one rupee @ 4% p.a. in three years on 31st March 204 the balance at bank was Rs. 2,42,360 and the investment realized Rs. 3,25,000. the debentures were paid off.

Give journal entries and show ledger account.

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