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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) |
||
- At the time of Redemption of Debentures:
|
Debenture A/c |
Dr. |
|
|
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’?
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
Long Answer Question
What is meant by conversion of debentures? Describe the method of such a conversion.
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.
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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."
Consider the following statements.
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".
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No Debenture Redemption Reserve is required for debentures issued by ______.
If debentures purchased in the open market are not immediately cancelled, they are treated as:
Premium on Redemption of Debentures Account is a ______ Account.
Premium on Redemption of Debentures Account is a ______.
What is the nature of Premium on Redemption of Debenture Account?
