Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Issue and Redemption of Debentures NCERT Solutions | What is meant by redemption of debenture

Welcome to the NCERT Solutions for Class 12th Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Issue and Redemption of Debentures. This page offers a step-by-step solution to the specific question from Exercise 1, Question 19: what is meant by redemption of debentures by lsqu....
Question 19

What is meant by redemption of debentures by ‘Purchase in the Open Market’?

Answer

According to companies Act, a company can redeem its debentures by purchasing them in the open market. If the company purchases the debentures at a premium, the amount paid in excess of the face value will be debited to 'loss on redemption of debentures' which will be transferred to profit and loss account and closed.

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