Advertisements
Advertisements
प्रश्न
What is meant by the redemption of debentures by “Purchase in the Open Market”?
Advertisements
उत्तर
According to the Company Act, if a company is authorised by its Articles of Association, only then may it purchase its own debentures from the open market. The main purpose of such a purchase is as follows:
- For immediate cancellation of debenture liability, if the interest rate on its debenture is higher than the market rate of interest.
- A company may also purchase its own debentures with the motive of investment and sell them at a higher price in future and thereby earn profit.
APPEARS IN
संबंधित प्रश्न
What is meant by ‘Premium on Redemption of Debentures’?
What is meant by redemption of debentures out of Capital?
Short Answer Question
Under which head is the ‘Debenture Redemption Reserve’ shown in the Balance Sheet?
Differentiate between redemption of debentures out of capital and out of profits.
Describe the steps for creating a sinking fund for the redemption of debentures.
Can a company purchase its own debentures in the open market? Explain.
X.Ltd. purchased a Machinery from Y. Ltd. at 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.
What journal entries will be made in the following cases when company redeems debentures at the expiry of period by serving the notice: (a) when debentures were issued at par with a condition to redeem them at premium; (b) when debentures were issued at premium with a condition to redeem that at par; and (c) when debentures were issued at discount with a condition to redeem them at premium?
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.
Own debentures are those debentures of the company which ______.
Profit on cancellation of own debentures is transferred to ______.
Give the necessary journal entries at time of redemption of debentures
"X Ltd. issued 500, 9% debentures of Rs.100 each at par and redeemable at par at the end of 5 years out of capital."
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:
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 ______.
