Redemption of Debentures

Questions Bank

  • Redemption of Debentures means discharge of liability on account of debentures repayment made to the debentureholder.
    2018-02-12 16:25:30
  • Disclosure of Debenture Redemption Reserve is shown under sub-head "Reserve and Surplus".
    2018-02-12 16:25:16
  • Source of Redemption of Debentures are (i) Out of Capital, (ii) Out of Profit, (iii) By Converting them into Shares or New Debentures
    2018-02-12 16:24:53
  • Combining various conditions of issue and redemption of debentures, there may be the following possibilities (i) Issued at Par, (ii) Issued at Premium, (iii) Issued at Discount.
    2018-02-12 16:24:20
  • Debentures are redeemable at a premium, a provision has to be made right at the time of the shares issued by debiting the amount of Loss on Issue of Debentures Account.
    2018-02-12 16:23:55
  • Premium on Redemption of Debetures is a personal account, as it states the company liability to pay in future i.e. at the time of redemption.
    2018-02-12 16:23:32
  • Interest on Debentues, is calculated at a fixed rate on its face value and is usually payable half-yearly. Debenture interest is charged on profit.
    2018-02-12 16:23:15
  • As per Income Tax Act, a company paying interest on debentures is required to deduct income tax at the prescribed rate from gross amount of debenture interest before any payment is made to debentureholder.
    2018-02-12 16:23:00

  • 2018-02-12 16:22:45

Questions Bank -

Ans. Redemption of Debentures refers to extinguishing or discharging the liability on account of debentures and in accordance with the terms of redemption stated in the debenture trust deed.

Ans. According to Companies Act, the term deposits means any deposits of money with a company which includes amount borrowed by a company but excludes of amounts as may be prescribed in consultation with RBI.

Ans. Charge is a registration of security given for securing loans taken or debentures issued by a company and includes mortgage. The various types of charge are (i) Fixed Charge and (ii) Floating Charge.

Ans. Redemption of debentures means discharging the liability on account of debentures.

Ans. Redemption of debenture at a price more than its par value, such excess price is known as premium on redemption of debentures.

Ans. Premium on redemption of debentures may be written off against capital profit or Profit and Loss Account.

Ans. The two methods of redemption are:
(i) Purchase of debentures.
(ii) Conversion of debentures.

Ans. Redemption of debentures means retaining of sufficient profits in the business for redemption. Such redemption is said to be out of profits.

Ans. Redemption out of capital, states where the debentures are redeemed by reducing the assets of the company.

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