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प्रश्न
Short Answer Question
How would you deal with ‘Premium on Redemption of Debentures’?
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उत्तर
When the debentures are redeemed at a price more than its face value or the par value, then it is said that the debentures are redeemed at premium. The difference between the redeemed price and the par value is regarded as a capital loss and this loss is written off till the redemption of the debentures. The Premium on Redemption of Debenture is shown in the Notes to Accounts under the sub-head of 'Other Long-term Liabilities'. The final balance is shown under the main head of 'Non-Current Liabilities' on the Equity and Liabilities side of the Company's Balance Sheet.
Accounting Treatment for Premium on Redemption on Debentures:
- At the time of the Issue of Debenture:
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Bank/Debenture Allotment A/c |
Dr. |
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Loss on issue of Debenture A/c |
Dr. |
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To Debenture A/c |
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To Premium on Redemption |
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(Debenture issued with the term of redemption at premium) |
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- At the time of Redemption of Debentures:
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Debenture A/c |
Dr. |
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Premium on Redemption A/c |
Dr. |
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To Debenture Holder A/c |
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(Amount of debentures due to debenture holders) |
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संबंधित प्रश्न
Short Answer Question
What is meant by redemption of debentures by conversion?
Short Answer Question
What is meant by redemption of debentures by ‘Purchase in the Open Market’?
Short Answer Question
Under which head is the ‘Debenture Redemption Reserve’ shown in the Balance Sheet?
Long Answer Question
Can a company purchase its own debentures in the open market? Explain
Long Answer Question
What is meant by conversion of debentures? Describe the method of such a conversion.
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Calculate the amount of discount to be written-off each year. Give journal entries also.
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Pass the necessary journal entries for the redemption of debentures.
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Profit on cancellation of own debentures is transferred to ______.
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Statement 1 - "No DRR is required for debentures issued by All India Financial Institutions, regulated by RBI and Banking Companies for both public as well as privately placed debentures".
Statement 2 - DRR is required for debentures issued by All India Financial Institutions, regulated by RBI and Banking Companies for both public as well as privately placed debentures"
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According to SEBI guidelines, what percentage of the amount of debentures must be transferred to Debenture Redemption Reserve, before the commencement of redemption of debentures, in the case of convertible debentures?
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