Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Issue and Redemption of Debentures NCERT Solutions | What is meant by conversion of debenture
What is meant by conversion of debentures? Describe the method of such a conversion.
When a debenture holder can conveit his/her debentures into shares or new debentures after the expiry of a specified period of time, then it is known as redemption of debentures by conversion. As the company does not need to pay any. funds for the redemption, so there is no need to maintain Debenture Redemption Reserve (DRR). The new shares or debentures may be issued at par, premium or at discount.
If a debenture holder exercises the conversion option, then the issue price of shares must be equal to or less than the amount actually received from debentures.
Accounting Treatment For amount due to debenture holders
Debenture A/c. Dr
To Debenture holders A/c
(Debentures redeemed)
For discharging liability to the debenture holders .
Debenture holders A/c Dr
To Shares/Debentures (New) A/c
(Debenture holder amount discharged)
More Questions From Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Issue and Redemption of Debentures
- Q:- What is meant by a Debenture?
- Q:-
State the meaning of ‘Debentures issued as a collateral security’.
- Q:-
What is ‘Capital Reserve’?
- Q:-
Describe the steps for creating Sinking Fund for redemption of debentures.
- Q:-
Can the company purchase its own debentures?
- Q:-
What is discount on issue of debentures?
- Q:-
Under which head is the ‘Debenture Redemption Reserve’ shown in the balance sheet?
- Q:-
Can a company purchase its own debentures in the open market? Explain.
- Q:-
What is meant by ‘Issue of debenture at discount and redeemable at premium?
- Q:-
Explain the different types of debentures?
Popular Questions of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements
- Q:-
What do you mean by Ratio Analysis?
- Q:-
List the techniques of Financial Statement Analysis.
- Q:-
State the meaning of financial statement analysis?
- Q:-
What are various types of ratios?
- Q:-
Distinguish between Vertical and Horizontal Analysis of financial data.
- Q:-
What are limitations of financial statement analysis?
- Q:-
What relationships will be established to study?
(a) Inventory Turnover (b) Debtor Turnover
(c) Payables Turnover (d) Working Capital Turnover - Q:-
State the meaning of Analysis and Interpretation.
- Q:-
List any three objectives of analysing financial statements?
- Q:-
The liquidity of a business firm is measured by its ability to satisfy itslong-
term obligations as they become due. What are the ratios used forthis purpose?
Recently Viewed Questions of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements
- Q:-
What are liquidity ratios? Discuss the importance of current and liquid ratio.
- Q:-
State the meaning of Analysis and Interpretation.
- Q:-
List the techniques of Financial Statement Analysis.
- Q:-
Distinguish between Vertical and Horizontal Analysis of financial data.
- Q:-
How would you study the Solvency position of the firm?
- Q:-
What are important profitability ratios? How are these worked out?
- Q:-
Explain how common size statements are prepared giving an example.
- Q:-
Explain the nature of the financial statements.
- Q:-
What do you understand by analysis and interpretation of financial statements? Discuss its importance.
- Q:-
What do you mean by Common Size Statements?
- All Chapters Of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements
- All Subjects Of Class 12