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प्रश्न
Long Answer Question
What is meant by conversion of debentures? Describe the method of such a conversion.
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उत्तर
hen a debenture holder can convert his/her debentures into shares or new debentures after the expiry of a specified period of time, then it is known as redemption of debentures by conversion. As the company does not need to pay any funds for the redemption, so there is no need to maintain Debenture Redemption Reserve (DRR). The new shares or debentures may be issued at par, premium or at discount.
If a debenture holder exercises the conversion option, then the issue price of shares must be equal to or less than the amount actually received from debentures.
Accounting Treatment
- For amount due to debenture holders
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Debenture A/c |
Dr. |
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To Debenture holders A/c |
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(Debentures redeemed) |
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- For discharging liability to the debenture holders
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Debenture holders A/c |
Dr. |
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To Shares/Debentures (New) A/c |
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(Debenture holder amount discharged) |
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संबंधित प्रश्न
Short Answer Question
What is meant by ‘Premium on Redemption of Debentures’?
What is meant by redemption of debentures?
Short Answer Question
How would you deal with ‘Premium on Redemption of Debentures’?
Short Answer Question
What is meant by redemption of debentures by ‘Purchase in the Open Market’?
Long Answer Question
Explain the guidelines of SEBI for creating Debenture Redemption Reserve.
X.Ltd. purchased a Machinery from Y for an agreed purchase consideration of Rs 4,40,000 to be satisfied by the issue of 12% debentures of Rs 100 each at a premium of Rs 10 per debenture. Journalise the transactions.
A company issued 10% Debentures of the face value of Rs,1,20,000 at a discount of 6% on April 01, 2011. The debentures are payable by annual drawings of Rs 40,000 commencing from the end of third year.
How will you deal with discount on debentures?
Show the discount on debentures account in the company ledger for the period of duration of debentures. Assume accounts are closed on March 31 every year.
Krishna Ltd. had outstanding 20,000, 9% debentures of ₹ 100 each on 1st April 2014. These debentures were redeemable at a premium of 10% in two equal installments starting from 31st March 2018. The company had a balance of ₹ 4,00,000 in Debenture Redemption Reserve on 31st March 2017. Pass necessary journal entries for the redemption of debentures in the books of Krishna Ltd. for the year ended 31st March 2018.
Convertible debentures cannot be issued at a discount if ______.
Which of the methods can be adopted to write off discount/loss on issue of debentures against the revenue profits?
Which of the following methods are there for redemption of debentures?
Which of the following given statement is correct.
Statement 1 - "Bond and debentures are same in terms of contents and texture."
Statement 2 - "Bond and debentures are not same in terms of contents and texture."
No Debenture Redemption Reserve is required for debentures issued by ______.
Shashi Ltd. decided to redeem its 8,000, 11% Debentures of ₹ 100 each at a premium of 10%. The minimum amount transferred to Debenture Redemption Reserve will be: (assume that the company is not listed)
If debentures purchased in the open market are not immediately cancelled, they are treated as:
Debentures can be redeemed out of:
Premium on redemption of debentures is generally provided at the time of ______.
Sources of finance for the redemption of debentures are ______.
