Redemption of Debentures
Commerce ⇒ Accountancy
Redemption of Debentures starts at 12 and continues till grade 12.
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A company redeems debentures by drawing lots. What is the main advantage of this method?
Explain the accounting treatment for the conversion of debentures into shares at the time of redemption.
Explain the difference between redemption of debentures out of profits and out of capital.
Explain the impact of redemption of debentures on the company's capital structure.
A company has a balance of ₹2,00,000 in Debenture Redemption Reserve and needs to redeem debentures worth ₹8,00,000. How much more should be transferred to DRR as per the 25% rule?
A company has a Sinking Fund of ₹1,00,000 and Sinking Fund Investments of ₹1,05,000. On sale, investments realize ₹1,10,000. What is the profit on sale of investments?
A company issued 10,000 debentures of ₹100 each, redeemable at a premium of 5%. Calculate the total amount payable on redemption.
A company issued 2,000 debentures of ₹100 each at a discount of 5%, redeemable at a premium of 10%. Calculate the total amount payable on redemption.
Which account is credited when debentures are redeemed at a premium? (1) Premium on Redemption of Debentures Account (2) Securities Premium Account (3) Profit and Loss Account (4) Capital Reserve Account
Which account is debited when debentures are redeemed at a premium? (1) Debenture holders' account (2) Premium on Redemption of Debentures account (3) Securities Premium account (4) Profit and Loss account
Which of the following is credited when profit is made on cancellation of own debentures? (1) Profit and Loss Account (2) Capital Reserve (3) General Reserve (4) Securities Premium Account
Which of the following is NOT a method of redemption of debentures? (1) Lump sum payment at maturity (2) Payment in installments (3) Conversion into shares (4) Issue of bonus shares
Fill in the blank: As per Companies Act, 2013, a company must create a _______ before redeeming debentures out of profits.
Fill in the blank: The amount of premium payable on redemption of debentures is usually written off from _______.
Fill in the blank: The amount transferred to Debenture Redemption Reserve should not be less than _______ of the value of debentures to be redeemed, as per Companies (Share Capital and Debentures) Rules, 2014.
Fill in the blank: The balance in Debenture Redemption Reserve after redemption of all debentures is transferred to _______.
State whether the following statement is True or False: Debenture Redemption Reserve is mandatory for all companies issuing debentures in India.
State whether the following statement is True or False: Debenture Redemption Reserve is shown under 'Reserves and Surplus' in the Balance Sheet.
State whether the following statement is True or False: Sinking Fund Investments are shown under 'Current Assets' in the Balance Sheet.
State whether the following statement is True or False: The amount of Debenture Redemption Reserve can be used for issuing bonus shares.
