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प्रश्न
Short Answer Question
How would you deal with ‘Premium on Redemption of Debentures’?
उत्तर
When the debentures are redeemed at a price more than its face value or the par value, then it is said that the debentures are redeemed at premium. The difference between the redeemed price and the par value is regarded as a capital loss and this loss is written off till the redemption of the debentures. The Premium on Redemption of Debenture is shown in the Notes to Accounts under the sub-head of 'Other Long-term Liabilities'. The final balance is shown under the main head of 'Non-Current Liabilities' on the Equity and Liabilities side of the Company's Balance Sheet.
Accounting Treatment for Premium on Redemption on Debentures:
- At the time of the Issue of Debenture:
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Bank/Debenture Allotment A/c |
Dr. |
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Loss on issue of Debenture A/c |
Dr. |
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To Debenture A/c |
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To Premium on Redemption |
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(Debenture issued with the term of redemption at premium) |
||
- At the time of Redemption of Debentures:
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Debenture A/c |
Dr. |
|
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Premium on Redemption A/c |
Dr. |
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To Debenture Holder A/c |
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(Amount of debentures due to debenture holders) |
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संबंधित प्रश्न
Short Answer Question
What is meant by ‘Redemption out of Capital?
Short Answer Question
What is meant by redemption of debentures by ‘Purchase in the Open Market’?
Short Answer Question
Under which head is the ‘Debenture Redemption Reserve’ shown in the Balance Sheet?
Long Answer Question
Explain the guidelines of SEBI for creating Debenture Redemption Reserve.
Long Answer Question
Can a company purchase its own debentures in the open market? Explain
Long Answer Question
What is meant by conversion of debentures? Describe the method of such a conversion.
X.Ltd. purchased a Machinery from Y for an agreed purchase consideration of Rs 4,40,000 to be satisfied by the issue of 12% debentures of Rs 100 each at a premium of Rs 10 per debenture. Journalise the transactions.
A company issued debentures of the face value of Rs 5,00,000 at a discount of 6% on April 01, 2012. These debentures are redeemable by annual drawings of Rs,1,00,000 made on March 31 each year. The directors decided to write off discount based on the debentures outstanding each year.
Calculate the amount of discount to be written-off each year. Give journal entries also.
What journal entries will be made in the following cases when company redeems debentures at the expiry of period by serving the notice: (a) when debentures were issued at par with a condition to redeem them at premium; (b) when debentures were issued at premium with a condition to redeem that at par; and (c) when debentures were issued at discount with a condition to redeem them at premium?
Which of the methods can be adopted to write off discount/loss on issue of debentures against the revenue profits?
Which of the following column indicated in the statement given below is to be debited?
"Purchase of own debentures by the company for cancellation" ·
Which of the following methods are there for redemption of debentures?
Consider the following statements.
Statement 1 - "No DRR is required for debentures issued by All India Financial Institutions, regulated by RBI and Banking Companies for both public as well as privately placed debentures".
Statement 2 - DRR is required for debentures issued by All India Financial Institutions, regulated by RBI and Banking Companies for both public as well as privately placed debentures"
Debentures can be redeemed out of:
Which of the following is not true about Debenture Redemption Reserve (DRR)?
Premium on Redemption of Debentures Account is a ______ Account.
Premium on redemption of debentures is generally provided at the time of ______.
What is the nature of Premium on Redemption of Debenture Account?
