Recently Sachin Bhawar, a CA INTERMEDIATE student of Koncept Education, sent us handwritten notes on the chapter 'Share Capital & Debentures’ of subject ‘Corporate and Other Laws’.We went through his notes and were surprised to see that the notes were extremely good. You can change your ad preferences anytime. By Lump-sum Payment: under this method, the company redeems the debentures by paying the whole amount at once that is lump-sum. In Instalments through a draw of lots: under this method, debentures are redeemed in instalments and debentures to be redeemed are selected by draw. (2) Investment in the Specified Securities: (6) Sources of Finance for the Redemption of Debentures: The amount required for redemption may be arranged: Q.1- What Do You Mean by Redemption of Debentures by Lump-sum Payment? all are explained in this single presentation.
If you continue browsing the site, you agree to the use of cookies on this website. By purchase from open market: Under this method, the company purchases its own debentures through stock exchanges for the purposes of cancellation. In this case, the time of repayment is known in advance and the company can plan its financial resources accordingly, Under this method, the debentures are redeemed in instalments and debentures to be redeemed are selected by draw, For example, total debentures of `2,00,000 may be redeemed at the rate of `50,000 per annum. We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. Fundamentals Of Accounting: Debentures 39 Treatment of Discount on issue of Debentures . Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Shown in the Equity and Liability part of the Balance Sheet under the head ‘Shareholders’ fund and sub-head ‘Reserves and Surplus’. (1) Debenture Redemption Reserve: DRR is a reserve created out of profits for redeeming debentures. Give Journal Entries, (a) Meaning of Redemption of Debentures by Lump-sum Payment, Surplus A/c Dr. *****To Debenture Redemption Reserve A/c *****, (2) On Investment or Making Deposit in the Specified Securities, Debenture Redemption Reserve A/c Dr. *****, (3) On Debentures Becoming Due for Payment. They are debentures without the convertibility feature attached to them. 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Namely : Also Check: Important Questions for Redemption of Debentures, To Bank A/c *****, Debentures A/c Dr. *****, To Debenture holders A/c *****. Slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. The great resource for you at an unbelievable Price. All India Financial Institutions (AIFIs) regulated by RBI.
(a) Meaning of Redemption of Debentures by Purchase From Open Market. According to section 74(4) of the Company’s Act, 2013 and Rule 18(7) of the Companies (Share Capital and Debentures) Rules, 2014, a Company is required to transfer an amount equal to at least 25% of the value of debentures to the Debenture Redemption Reserve a/c before redemption of debentures.
By conversion into shares or new debentures. It means repayment of the number of debentures to the debenture holders. Q.3- What Do You Mean by Redemption of Debentures by Conversion? Looks like you’ve clipped this slide to already. Out of profits: if a company retains a part of divisible profits every year and utilises it for the purpose of redemption of debentures. WHAT IS IPO? When all the debentures are redeemed, DRR Account is closed by transferring the amount to General Reserve.
a) If debentures are to be redeemed at Par: Bank A/c Dr. *****, Debenture holders A/c Dr. *****, (6) On Transfer of DRR to General Reserve, Debenture Redemption Reserve A/c Dr. *****. If you continue browsing the site, you agree to the use of cookies on this website. What you want to learn about shares and Debentures. See our User Agreement and Privacy Policy. Scribd will begin operating the SlideShare business on December 1, 2020 Dearest Students. If the company has never issued equity to the public, it's known as an IPO. As a result, they usually carry higher interest rates than their convertible counterparts. When Purchase Cost of Own Debentures < Nominal Value of Debentures. Non Convertible Debentures (NCD): Non-convertible debentures , which are simply regular debentures, cannot be converted into equity shares of the liable company. This nicely animated Powerpoint presentation covers 17 difeferent Topics. Illustration . Presented By:- Q.4- What Do You Mean by Redemption of Debentures by Purchase From Open Market? When debentures are reclaimed, liability on account of debentures is being discharged. Under this method, the debentures are redeemed by converting them into new class debentures or shares.
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