Practice Test

G Ltd. had issued 12%, Rs. 10,00,000 debentures @ Rs. 100 in the past. For the purpose of redemption, it maintains a debenture redemption fund with an annual contribution of Rs. 90,000. Balance of fund stood at Rs. 4,50,000 represented by 6%, Rs. 5,00,000 government loan. Rs. 2,00,000 government loan was sold @ Rs. 93.50 and the proceeds were utilized to purchase debentures for cancellation @ Rs. 85 each. Assume that Rs. 20,000 debentures have been redeemed out of capital and the balance with face value of Rs. 1,80,000 has been redeemed out of debenture redemption fund account. Closing balance of Debenture Redemption Fund A/c after giving effect to above transactions will be:

Debenture holders are called the ______ of a company.

If the value of debentures allotted to vendors for acquiring some assets as payment for purchase consideration is more than the agreed purchase price, the difference is credited to: