Advertisements
Advertisements
प्रश्न
Short Answer Question
What is meant by redemption of debentures by ‘Purchase in the Open Market’?
Advertisements
उत्तर
According to the Company Act, if a company is authorised by its Article of Association, only then it may purchase its own debentures from the open market. The main purpose of such purchase is as follows:
1. For immediate cancellation of debenture liability, if the interest rate on its debenture is higher than the market rate of interest.
2. A company may also purchase its own debentures with the motive of investment and sell them at higher price in future and thereby earn profit.
APPEARS IN
संबंधित प्रश्न
What is meant by redemption of debentures?
Short Answer Question
How would you deal with ‘Premium on Redemption of Debentures’?
What is meant by redemption of debentures out of Capital?
Long Answer Question
Differentiate between redemption of debentures out of capital and out of profits.
Long Answer Question
Describe the steps for creating Sinking Fund for redemption of debentures.
Long Answer Question
Can a company purchase its own debentures in the open market? Explain
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 debentures of the face value of Rs 5,00,000 at a discount of 6% on April 01, 2012. These debentures are redeemable by annual drawings of Rs,1,00,000 made on March 31 each year. The directors decided to write off discount based on the debentures outstanding each year.
Calculate the amount of discount to be written-off each year. Give journal entries also.
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.
On 1st April 2015, Mayfair Ltd. issued 4,000 9% debentures of ₹ 100 each at a discount of 5% redeemable at a premium of 8%. The debentures were redeemable on 31st March 2019. The company created the necessary minimum amount of debenture redemption reserve and purchased the required amount of debenture redemption investments as per the provisions of Companies Act, 2013.
Pass the necessary journal entries for the redemption of debentures.
Convertible debentures cannot be issued at a discount if ______.
Own debentures are those debentures of the company which ______.
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 ______.
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?
Debentures can be redeemed out of:
Premium on Redemption of Debentures Account is a ______ Account.
