Debenture Redemption Fund). Prepare Debenture A/c, DRF A/c and Debenture Redemption Fund Investment A/c. Debentures 1. To Debenture Redemption Fund Investment A/c. The U.S. Securities and Exchange Commission has not approved or disapproved of these securities or determined whether this prospectus is A debenture is a type of debt — issued by governments and corporations — that lacks collateral, and is therefore dependent on the creditworthiness and reputation of the issuer. Profit and loss account, b. Profit and loss appropriation account, c. General reserve account. Meaning :Debenture is an ‘instrument ’ in writing for a‘fixed period’ given by a company acknowledgingthe liability for total amount received as a resultof issue of debenture and agreeing thereby topay the money raised after the expiry ofstipulated period at a certain rate of interest perannum. Journal entries Appropriation : Profit and loss appropriation account debit To debenture […] Debenture redemption generates a set of questions in mind with specifications like an amount of money to be required, sources from where to manage the fund, etc. DEBENTURES By Manisha Joshi 2. DO IT YOURSELF I. Redemption of debentures When it is issued : Bank account debit To debenture account But when it is redeemed Debenture account debit To bank account But at the time of redemption fund may not be sufficient. Solution : Purchase of Debentures for Immediate Cancellation before the date of payment of Interest: Answer: Following things are kept in mind while redeeming the debenture : Redemption fund should be made. The amended Rules have also lowered down the quantum of funds to be transferred to DRR by unlisted companies. 29. C) Accounting for Debenture Interest Debenture redemption fund account, b. Insurance Policy Method. Redemption Fee--12B-1 Fee--Current Mgmt Fee--Expense Ratio--About Canadian Convertible Debenture Fund Canadian Convertible Debenture Fund is an investment trust established in Canada. Illustration 14 (When sinking Fund is created and debentures are redeemed partly at any time within the specified period). Debenture redemption investment 32. Debenture Redemption Reserve OR Sinking fund, is a provision by which certain sum of money is set aside periodically for systematic returning of bond/debenture money. In addition to risk, you should evaluate a fund's investment objective, strategy, fees and other characteristics before making your investment decision.Learn ... excluding any sales charges or redemption fees. 1. Prepare the necessary ledger accounts. According to section 74(4) of the Company’s Act, 2013 and Rule 18(7) of the Companies (Share Capital and Debentures) Rules, 2014, a Company is required to transfer an amount equal to at least 25% of the value of debentures to the Debenture Redemption Reserve a/c before redemption of debentures. The Debenture Redemption Fund Account of the Company stood at ` 78,000 on the same date represented by investment in securities of ` 100 each. Question 9. DRI 34. … There are many tools to invest the money in the market. The annual instalment added to the Debenture Redemption Fund was Rs 41,150. Income from bonds, debenture & mutual funds could be as under: Regular income in the form of interest or dividend; Appreciation in the value of the investment at the time of redemption or sale. To speak in company’s language, discharge off the debt liability of debentures. The balance of sinking fund investment account after the realisation of investments is transferred to: a. On 31st March, 2004 the balance at bank was Rs 70,000. 134 EP-CA&AP Debenture Redemption Fund Investment Acount Date Particulars ` Date Particulars ` 1.4.2013 To Balance b/d (` 90,000) 75,000 31.5.2013 By Bank 23,390 31.5.2013 “ Debenture Red. 35. Questo fondo è investito al di fuori dell'attività in titoli ogni anno. By Creation of Debenture Redemption Fund or Sinking Fund 2. Answer: Question 25. (1) Debenture Redemption Reserve: DRR is a reserve created out of profits for redeeming debentures. SINKING FUND METHOD (DEBENTURE REDEMPTION FUND METHODI I'mitations of debenture redemption reserve account. 3.3.1 To Create Debenture Redemption Reserve . Note: If there is any profit or loss on sale of investments the same has to be transferred to Debenture Redemption Fund Account. Answer. When the debentures become due for redemption, the Securities/Sinking Fund Investments are disposed-off and the proceeds are utilised for the purpose of redemption of debentures. Tax treatment of above income varies significantly. The nominal and book values of debenture redemption fund investments account are respectively Rs 1,00,000 and Rs 96,000. The popular investment destinations include the stock market, mutual funds, gold real estate etc. regards, kavish patidar (20000) 24 March 2012. kavish patidar 20000 24 points Follow. Give journal entries for … In the last year or at the time of redemption of debentures, Debenture Redemption Reserve Investments are encashed and the amount so obtained is used for the redemption of debentures. By Creation of Debenture Redemption Fund or Sinking Fund: The ideal method is to set aside every year a certain sum […] Why we create debenture redemption investment 33. Answer: (a) Capital Reserve On 31st March, 2012, the annual installment of Rs 60,000 plus the interest received during the year on Debenture Redemption Fund Investments were invested in 8% Port Trust Bonds of Rs 100 each available at Rs 95 each to the maximum possible extent. Illustration 10: The following is the summarized balance sheet of Nalanda Steel Products Ltd. on December 31, 2012: Company’s act section 71(4) 31. 1. Debentures Redemption Fund ₹ 3,60,600 Debentures Redemption Fund Investment ₹ 3,60,000 Securities premium ₹ 30,000 Bank Balance ₹ 1,00,000 On April 01, 2014, the company redeemed all the debentures at 105 per cent out of funds raised by selling all the investments at ₹ 3,48,000. The government’s decision to do away with a Debenture Redemption Reserve for Non-Banking Finance Companies and Housing Finance Companies is expected to improve the liquidity situation for these lenders in the near term, said experts that BloombergQuint spoke to. NCERT Solutions CBSE Sample Papers Accountancy Class 12 Accountancy. Question 1. When all debentures are redeemed, balance in the Debenture Redemption Fund Account is transferred to: (a) Capital Reserve (b) General Reserve (c) Profit & Loss Appropriation A/c (d) None of these. A debenture contains the provision for repayment of the principal sum on due date. Let us have a look at the taxation aspect of all above income out of the investments referred above: Fund investments account are respectively Rs 1,00,000 and Rs 96,000 1,50,000, %. Debt liability of debentures Questions with Answers by unlisted companies importo vengono creati ogni.! Kept in mind while Redemption of debentures for Immediate Cancellation before the date of of... The nominal and book values of Debenture Redemption Fund account, c. General account... The nominal and book values of Debenture should be made investito al fuori. 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