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

Profit and loss A/c

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General reserve A/c

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Debenture A/c

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Cash A/c

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Solution

The correct option is B General reserve A/c
The balance of the Debentures Sinking Fund after redemption of debentures is transferred to General Reserve account. It is the amount which is kept separately out of redeemed amount from debentures, that is why it is transferred to general reserve account.

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Similar questions

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

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

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.

On January 1,2011, the following balances appeared in the books of Z Ltd

$\begin{matrix} Items & Rs. 6 % Debentures & 1, 00, 000 Debentures Redemption Reserve Fund & 80, 000 Debentures Redemption Reserve Fund Investments & 80, 000 \end{matrix}$

The investments consisted of 4 % Government securities of the face value of Rs. 90,000.
The annual instalment was Rs. 16,400. On December 31, 2011, the balance at Bank was Rs. 26,000 (after receipt on interest on Debenture Redemption Reserve Fund Investment). Investments were realised at 92 % and the Debentures were redeemed. The interest for the year had already been paid.
Show the ledger accounts affecting redemption.

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

The correct option is B General reserve A/cThe balance of the Debentures Sinking Fund after redemption of debentures is transferred to General Reserve account. It is the amount which is kept separately out of redeemed amount from debentures, that is why it is transferred to general reserve account.