1 / 7

DK Goel Solutions Chapter 9 Redemption of Debentures

DK Goel Solutions Chapter 9 Redemption of Debentures as per latest DK Goel Book available for free<br><br>https://dkgoelsolutions.com/class-12/chapter-9-company-accounts-redemption-of-debentures/

DKGoelsolution
Download Presentation

DK Goel Solutions Chapter 9 Redemption of Debentures

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. DK Goel Solutions Chapter 9 Redemption of Debentures DK Goel Solutions Chapter 9 Redemption of Debentures, which is laid out by master Accountancy instructors from the most recent form of DK Goel Class 12 Accountancy books. We, at Dk Goel Solutions help students to fathom every one of the hypotheses, specifically. There are various ideas in Accountancy, however the ideas of Trial Balance, Depreciation and Bank Reconciliation Statement (BRS) are required. DK Goel Solutions Class 12 – Chapter 9 Short Answer Questions Q1. Shubh Limited has the following balance appearing in its Balance Sheet: The Company decided to redeem its 9% debentures at a premium of 10%. You are required to suggest the way in which the company can utilise the securities premium Amount (Rs.). Sol. 1 1.) Use Rs. 10,00,000 to write off the Commission on Underwriting. 2.) Use Balance Rs. 12,00,000 to pay down 9% Redemption Premium Debentures. Numerical Questions

  2. Q1. Kaveri Ltd. issued 50,000, 8% Debentures of Rs. 100 each at par on Oct. 1, 2012 redeemable on March 31, 2016. It was decided to invest 15% of the face value of debentures to be redeemed towards Debentures Redemption Investment of 30th April, 2015. Debentures were redeemed on pending date. Record necessary entries for issue & redemption of debentures. Sol. 1 Points for Students:- Below are the sources of Finance for the Redemption of Debentures:-

  3. Amount required for the redemption of debentures may be managed by a Company from the following sources: (1) Redemption from the proceeds of fresh issue of shares and debentures. (2) Redemption of Debentures out of Capital. (3) Redemption of Debentures out of Profits. Q2. On 1st April, 2011. F Ltd. issued Rs. 40,00,000, 7% Debentures of Rs. 100 each at a premium of 5% redeemable at a premium of 10% at the end of 4 years. Investment as required by law was made in fixed deposit of the bank on 30th April earning interest @6% p.a. Pass journal entries at the time of Redemption of Debentures. Sol. 2

  4. Points for Students:- When a company needs more money to pay off its debentures, it may decide to issue new equity shares, preferred shares, or debentures. The proceeds from the new share capital and debenture issue are used to pay off the old debentures. The Company’s financial status is not harmed as a result of this form of redemption. Q3. Bank of Baroda issued 8,000, 8% Debentures of Rs. 100 each at a premium of 6% on 1st April, 2008 redeemable on 31st March, 2015. Record necessary entries for issue & redemption of debentures. Sol. 3

  5. Point for Students:- The term “redemption out of capital” refers to when no profits are set aside for debenture redemption. No benefit is passed to the debenture redemption reserve in this situation. It is not possible to redeem debentures solely out of capital because Section 71 of the Companies Act 2013 and the Securities and Exchange Board of India (SEBI) guidelines require the establishment of a Debenture Redemption Reserve equal to at least 50% of the amount of debentures issued before redemption begins. Q4. AFCON’s India Ltd. (an infrastructure company) issued 5,00,000, 9% Debentures of Rs. 20 each on April 1, 2005 redeemable on March 31, 2015. Investment as required by law was made in fixed deposit of the bank on 30th April. Record journal entries for issue & redemption of debentures. Sol. 4

  6. Points for Students:- Secured or Mortgage Debentures are those which are secured either on particular assets of the Company called fixed charge or on all assets of the company in general, called a floating charge. Fixed charge denies the company from dealing with mortgaged assets, whereas the floating charge does not prevent the Company from using the assets. If the company is unable to repay the debentures on the due date, the debenture holders can realise their money from the assets mortgaged with them. First mortgage debentures are those that have a first claim on the assets charged and second mortgage debentures are

  7. those having a second claim on the assets charged. In India, debentures have necessarily to be secured. Download Free study materials for your Examinations at DK goel Solutions

More Related