In this article we will discuss about the accounting entries for redemption of debentures. 1. Redemption Out of Profits: When debentures are redeemed out of profit, it is essential that an equal amount to the face value of the debentures redeemed will be transferred to Debenture Redemption Reserve Account. When all the debentures are redeemed, the Debenture Redemption Reserve Account [...]
In this article we will discuss about:- 1. Meaning of a Debenture 2. Features of a Debenture 3. Classes 4. Debenture and Debenture Stock. Meaning of a Debenture: Generally, companies, for their expansion and further development, may require funds. Funds flow in from the internal and external sources i.e. the owners' and outsiders' contribution. Internal fund of a company consists [...]
In this article we will discuss about the accounting entries relating to debenture trustees, explained with the help of an illustration. Generally, to look after the interest of the debenture-holders, certain persons are elected as trustees by the debenture-holders. Alternatively, the names of trustees may be mentioned in the prospectus inviting subscription for debentures of the company. The guide-lines issued [...]