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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) |
||
- 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 out of Capital?
Short Answer Question
What is meant by redemption of debentures by ‘Purchase in the Open Market’?
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
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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?
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Which of the following is not true about Debenture Redemption Reserve (DRR)?
Premium on Redemption of Debentures Account is a ______ Account.
