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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
What is meant by redemption of debentures?
Short Answer Question
What is meant by redemption of debentures by conversion?
Short Answer Question
How would you deal with ‘Premium on Redemption of Debentures’?
What is meant by redemption of debentures out of Capital?
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
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.
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.
Which of the methods can be adopted to write off discount/loss on issue of debentures against the revenue profits?
Which of the following column indicated in the statement given below is to be debited?
"Purchase of own debentures by the company for cancellation" ·
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."
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 ______.
Premium on Redemption of Debentures Account is a ______ Account.
Sources of finance for the redemption of debentures are ______.
What is the nature of Premium on Redemption of Debenture Account?
