Ruchi Ltd issued 42,000, 7% Debentures of Rs.100 each on 1st April, 2011, redeemable at a premium of 8% on 31st March 2015. The company decided to create required Debenture Redemption Reserve on 31st March 2014. The company invested the funds as required by law in a fixed deposit with State Bank of India on 1st April, 2014 earning interest at 10% per annum. Tax was deducted at source by the bank on interest at 10% per annum. Pass necessary Journal Entries regarding issue and redemption of debentures

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For issue- Bank A/c Dr. To Debenture capital ( par value ) To securities premium ( premium amount ) For redemption - Debenture holders A/c Dr. To Bank A/c
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