I.

First Year:


On the date of issue of Debentures:


1. For issue of Debentures


Bank A/c Dr.


To % Debentures A/c


At the end of first year:


2. For amount of Sinking Fund Charged to Profit &
Loss Appropriation A/c


Profit & Loss Appropriation A/c Dr.


To Sinking Fund A/c


3. For Investments made for the amount of sinking fund


Sinking Fund Investment A/c Dr. (with the amount of sinking
fund)


To Bank A/c

II.

At the end of second and subsequent years during the life
of the debentures excepting last year:


1. For receipt of interest on investment


Bank A/c Dr.


To Interest on Sinking Fund Investment A/c


2. For interest on investment t/f to sinking fund


Interest on Sinking Fund Investment A/c Dr.


To Sinking Fund A/c


3. For amount of Sinking Fund Charged to Profit &
Loss Appropriation A/c


Profit & Loss Appropriation A/c Dr.


To Sinking Fund A/c


4. For Investments made for the amount of sinking fund


Sinking Fund Investment A/c Dr. (with the total amount of
annual sinking fund + interest)


To Bank A/c

III.

Last year:


1. For receipt of interest on investment


Bank A/c Dr.


To Interest on Sinking Fund Investment A/c


2. For interest on investment t/f to sinking fund


Interest on Sinking Fund Investment A/c Dr.


To Sinking Fund A/c


3. For amount of Sinking Fund Charged to Profit &
Loss Appropriation A/c


Profit & Loss Appropriation A/c Dr.


To Sinking Fund A/c


4. For sale of investment


Bank A/c Dr.


To Sinking Fund Investment A/c


5. For gain on sale of investment


Sinking Fund Investment A/c Dr.


To Sinking Fund A/c


Or


For loss on sale of investment


Sinking Fund A/c Dr.


To Sinking Fund Investment A/c


6. For amount of debentures due to Debenture holders:


(a) when debentures are redeemable at par:


% Debentures A/c Dr.


To Debenture holders A/c


(b) when debentures are redeemable at premium:


% Debentures A/c Dr.


Premium on Redemption of Debentures A/c Dr.


To Debenture holders A/c


7. For payment to Debenture holders:


Debenture holders A/c Dr.


To Bank A/c


8. For transfer of Sinking Fund to General reserve


Sinking Fund A/c Dr.


To General Reserve A/c
