After the redemption of debentures, any credit balance in the Sinking Fund A/c is transferred to ______ A/c.

General reserve

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Capital reserve

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P & L

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None of these

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Solution

The correct option is A General reserve
After the redemption of all debentures, balance left in sinking fund is transferred to general reserve but the portion of the profit on sale of sinking fund investment is preferably transferred to capital reserve.

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Similar questions

Q. The balance of the Debentures Sinking Fund after redemption of debentures is transferred to____________.

Q. Venus Ltd. had 9,000, 9% Debentures of ₹ 100 each due for redemption . These debentures are to be redeemed in 3 equal installments (starting from 31st March,2015) at a premium of 10%. The company had a balance of ₹ 25,000 in the Debentures Redemption Reserve .
Pass necessary entries for redemption of debentures assuming that company transfer the balance of DRR to General Reserve after redeeming all the debentures.

After redemption is complete, the balance in Debenture Redemption Reserve is transferred to ___

Kotak Ltd. has the following balance on 1st April, 2016:

Rs.

Statement of Profit & Loss (2,00,000)

Debenture Redemption Reserve 6,00,000

Capital Reserve 5,00,000

It earned a profit of Rs. 10,00,000 for the year ended 31st March, 2017. It decided to transfer Rs. 2,00,000 to Debenture Redemption Reserve and Rs. 3,00,000 to General Reserve. Directors proposed a final dividend of Rs. 1,20,000.

Show how these items will appear in the Balance Sheet and notes to accounts.

Under Sinking Fund method, Sinking Fund or Debenture Redemption Fund of _______ the amount of present value of redemption amount of debentures is created out of profits every year.

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After the redemption of debentures, any credit balance in the Sinking Fund A/c is transferred to ______ A/c.

The correct option is A General reserveAfter the redemption of all debentures, balance left in sinking fund is transferred to general reserve but the portion of the profit on sale of sinking fund investment is preferably transferred to capital reserve.

The correct option is A General reserve
After the redemption of all debentures, balance left in sinking fund is transferred to general reserve but the portion of the profit on sale of sinking fund investment is preferably transferred to capital reserve.