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Question
What is meant by redemption of debentures out of Capital?
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Solution
Redemption out of capital occurs when no profits are set aside for debenture redemption. No profits are moved to the Debenture Redemption Reserve in this scenario.
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RELATED QUESTIONS
What is meant by ‘Premium on Redemption of Debentures’?
Differentiate between redemption of debentures out of capital and out of profits.
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"Purchase of own debentures by the company for cancellation" ·
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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