When debentures are redeemed out of profits, an equal amount is transferred to _______.

CRR

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Capital reserve

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Revenue reserve

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Debenture Redemption Reserve

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Solution

The correct option is A Debenture Redemption Reserve
At the time of redemption of debenture out of profits, companies are required to create debenture redemption reserve to the extent of redemption amount to protect investors.

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Similar questions

Where a company creates a Debenture Redemption Reserve for the redemption of such debentures, the amount shall be credited, out of its ___every year until such debentures are redeemed.

What entries for the redemption of debentures will be done when : (a) debentures are redeemed by annual drawings out of profits; (b) debentures are redeemed by drawing a lot out of capital; and (c) debentures are redeemed by purchasing them in the open market when sinking fund for the redemption of debentures is not maintained − (i) when out of profit, and (ii) when out of capital?

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.

Q. Dow Ltd. issued ₹ 2,00,000; 8% Debentures of ₹ 10 each at a premium of 8% on 30th June, 2016 redeemable on 31st March, 2018. How much amount should be transferred to Debentures Redemption Reserve before redemption of debentures?

As per SEBI Guidelines, an amount equal to _____ of the debenture issue must be transferred to Debenture Redemption Reserve before redemption begins.

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When debentures are redeemed out of profits, an equal amount is transferred to _______.

The correct option is A Debenture Redemption ReserveAt the time of redemption of debenture out of profits, companies are required to create debenture redemption reserve to the extent of redemption amount to protect investors.

The correct option is A Debenture Redemption Reserve
At the time of redemption of debenture out of profits, companies are required to create debenture redemption reserve to the extent of redemption amount to protect investors.