Read the following information and answer the questions:

On 1^st April 2013, a company made an issue of 10,000, 9% debentures of ₹ 100 each at ₹92 per debenture. The terms of issue provided for redemption of 2,000 debentures every year starting from 31^st March 2016, either by conversion into equity shares of ₹20 each or by drawn of lot at par at companies option. On 31^st March 2016 Company's redeemed 2,000, 9% debentures by converting them into equity shares of ₹20 each.

Company redeemed 2,000 debentures by draw of lot on 31^st March 2017. Account to be debited on this date for the payment of due amount :-

Debenture holder's A/c

The correct answer is Option 3- Debenture holder's A/c

At the time of redemption, the following journal entries will be recorded.
(a) Debentures A/c Dr.
          To Debentureholders A/c
(Amount due to debentureholders)

(b) Debentureholders A/c Dr.
          To Bank A/c
(Amount paid to debentureholders)