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Debenture Redemption Reserve

The issue pri...

Question

The issue price and redemption value of debentures cannot differ.

A

True

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B

False

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Q. IFCI Ltd.( An All India Financial Institution) issued 10,00,000; 9% Debentures of SRCC Ltd. ₹50 each on 1st April, 2011 redeemable on 1st April, 2017. How much amount of Debentures Redemption Reserve is required before the redemption of debentures? Also,pass journal entries for issue and redemption of debentures.

Q. IFCI Ltd.(An All India Financial Institution) issued 10,00,000; 9% Debentures of ₹ 50 each on 1st April, 2011 redeemable on 1st April, 2019. How much amount of Debentures Redemption Reserve is required before the redemption of debentures? Also, pass Journal entries for issue and redemption of debentures.

Q. Nirbhai Chemicals Ltd. issued ₹ 10,00,000; 6% Debentures of ₹ 50 each at a premium of 8% on 30th June, 2018 redeemable on 30th June, 2019. The issue was fully subscribed. Pass Journal entries for issue and redemption of debentures. How much amount should be transferred to Debentures Redemption Reserve before redemption of debentures? Also, state how much amount should be invested in specified securities?

Q. Manish Ltd. issued ₹ 40,00,000; 8% Debentures of ₹ 100 each on 1st April, 2017. The terms of issue stated that the debentures are to be redeemed at a premium of 5% on 30th June, 2019. The company decided to transfer ₹ 10,00,000 out of profits to Debentures Redemption Reserve on 31st March, 2018 and ₹ 10,00,000 on 31st March, 2019.
Pass Journal entries regarding the issue and redemption of debentures, DRR and Investment without providing for the interest or loss on issue of debentures.

Explain the different terms for the issue of debentures with reference to their redemption.

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