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Relay Ltd. (an unlisted Non NBFC) redeems its 8,000, 10% Debentures of ₹ 100 each in instalments as follows: - Accounts

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MCQ

Relay Ltd. (an unlisted Non NBFC) redeems its 8,000, 10% Debentures of ₹ 100 each in instalments as follows:

Date of Redemption Debentures to be redeemed
31st March, 2019 2,000
31st March, 2020 5,000
31st March, 2021 1,000

On the basis of the above details, what will be the amount of Debenture Redemption Reserve which the company will transfer to General Reserve on 31st March, 2021?

Options

  • ₹ 20,000

  • ₹ 50,000

  • ₹ 10,000

  • ₹ 80,000

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Solution

₹ 10,000

Explanation:

Amount of Debenture Redemption Reserve, which the company will transfer to General Reserve on 31st March, 2021 is 10,000.

∴ 10% × ₹ 1,00,000 = ₹ 10,000

Concept: Creation of Debenture Redemption Reserve
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