Pankaj Arora (Learner) (3134 Points)
30 September 2011xyz ltd. Co. issue 2%Non - Convertible debentures of Rs. 350 Crore of f.v. Rs. 1000000 on dt. 21.05.2009 and it will mature on 31.03.2011 Please calculate Premium amount on Maturity on dt. 31.03.11 and also let me know how to pass journal entry from issue to of NCD to Maturity.
Amit Gupta
(Loosening Myself)
(1508 Points)
Replied 30 September 2011
hey..u dnt hav mentioned any premium on maturity ..so journal entry on maturity would be:
Debenture A/c Dr Rs. 10,00,000
To bank Rs. 10,00,000
Jayesh
(Internal Auditor)
(214 Points)
Replied 30 September 2011
Premium would be calculated on FV i.e. 10 lacs, therefore, 8.4% of Rs. 10lacs comes to Rs.84000.
entry would be:
1)Premium on maturity a/c Dr. --- Rs.84000/-(in B/s - Under Miscellaneous Exp)
To Premium payable a/c -----Rs.84000(in b/s- shown under Provision)
Premium amount would be eaually spread over the maturity period(say 6 years) and every year that proportion(Rs.12000=84000/6) is transferred to P/L account.
Pankaj Arora
(Learner)
(3134 Points)
Replied 30 September 2011
But friend above query is from tata motors annual report . And tata motors showing Debenture amount Rs. 350 Crore and redemption premium amount 96.55 crore ( 8.40%) and it will redeem on 31/03/2013.
I also calculate and my figure was same as you but I did not get what mentioned in tata motors annual report.
Amit Gupta
(Loosening Myself)
(1508 Points)
Replied 30 September 2011
Hey there is possibility that the debenture redemption premium cud be of other debentures
Pankaj Arora
(Learner)
(3134 Points)
Replied 30 September 2011
sorry sir its clearly return for which amount company redemption debenture premium provided in books ...
Amit Gupta
(Loosening Myself)
(1508 Points)
Replied 30 September 2011
Boss i think 8.4% should be interest rate..How cn company show 96.5 cr premium when the total premium is 84000/-only.
Cn u jst enclose the report here ??
Pankaj Arora
(Learner)
(3134 Points)
Replied 30 September 2011
please see attachment on page no. 68.
8.40 % is yield to maturity
Pankaj Arora
(Learner)
(3134 Points)
Replied 30 September 2011
can you see from tata motors official website annaul report of 2011?
Amit Gupta
(Loosening Myself)
(1508 Points)
Replied 30 September 2011
I have download the report frm thri website..i dnt find any 8.4% premium thing there???
Amit Gupta
(Loosening Myself)
(1508 Points)
Replied 30 September 2011
I am nt getting this..bt will let u kno by tomm
CAclubindia
