Practicing Success
Match the following-
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1) a, 2) b, 3) c, 4) d 1) c, 2) d, 3) a, 4) b 1) d, 2) c, 3) b, 4) a 1) a, 2) d, 3) c, 4) b |
1) c, 2) d, 3) a, 4) b |
* Purchase of own debentures in the open market- Redemption of debentures refers to extinguishing or discharging the liability on account of debentures in accordance with the terms of issue. In other words redemption of debentures means repayment of the amount of debentures by the company. There are four ways by which the debentures can be redeemed- * All India financial institutions regulated by RBI- All India financial institutions registered by Reserve Bank of India, banking companies, NFBCs registered with Reserve bank of India, Housing Finance companies registered to the National Housing bank and the companies listed on stock exchange and unlisted companies are exempted from creating Debenture Redemption Reserve and may redeem debentures out of capital. * Discount on the issue of debentures- Discount or Loss on issue of debentures is a capital loss and is written-off in the year when debentures are issued. Discount or loss can be written-off from securities premium reserve [section 52(2)]. In case, capital profit do not exist or are inadequate, the amount should be written off against revenue profits of the year. *Interest on debentures- Debenture is a written instrument acknowledging a debt under the common seal of the company. It contains a contract for repayment of principal after a specified period or at intervals or at the option of the company and for payment of interest at a fixed rate payable usually either half-yearly or yearly on fixed dates. |