Debenture Redemption Reserve: A debenture redemption reserve is a provision that was added to the Indian Companies Act of 1956 during an amendment in the year 2000. VOTING RIGHTS A shareholder has a voting rights whereas a debenture holder has no such rights.

When debentures are redeemed, liability on account of debentures is discharged. In other words redemption of debentures means repayment of the amount of debentures by the company.
If there is a case of convertible debentures then the debenture redemption reserve shall be created in respect of non convertible portion of debentures. NON-CONVERTIBLE DEBENTURES. The methods of redemption of debentures and , meaning of redemption of debentures are explained below.

Redemption of debentures refers to the repayment of these debentures by the company to the debenture holders. If there is a case of convertible debentures then the debenture redemption reserve shall be created in respect of non convertible portion of debentures.

ADVERTISEMENTS: The following points highlight the two cases of redemption of debentures at the expiry of specific period. Redemption by Conversion: Sometimes debentures are redeemed by conversion i.e. Out of Capital 2. Redemption of Debentures. When debentures are redeemed, liability on account of debentures is discharged. REDEMPTION OF DEBENTURES 8.3 1. The cases are: 1. So the company will discharge its liability and remove it from the balance sheet.

Let us see the types of debentures issued, terms of issue, the redemption of debentures and the accounting treatment for the same.

on changes to the rights attached to the debentures. When a company wishes to raise capital but does not want to dilute their equity they issue debentures. INTRODUCTION A debenture is an instrument issued by a company under its seal, acknowledging a debt and containing provisions as regards repayment of the principal and interest. The word ‘debenture’ translates to a written instrument as debt. There are four ways by which the debentures can be redeemed. Redemption of Debentures Meaning . INCOME Interest on the debentures is payable Redemption of debentures refers to extinguishing or discharging the liability on account of debentures in accordance with the terms of issue.

old debentures are exchanged for new debentures or shares. The best app for CBSE students now provides accounting for partnership firm’s fundamentals class 12 Notes latest chapter wise notes for quick preparation of CBSE board exams and school-based annual examinations. Payment in installments The amount which is credited to the debenture redemption reserve must not be utilised by the company itself …

The debentures are usually repaid after the expiry of certain time period. Amount of funds required for redemption of debentures is quite large and, therefore, prudent companies make sufficient provision out of profits and accumulate funds to redeem debentures. CONVERTIBLE DEBENTURES . Redemption of Debentures out of profits-Investment in specified securities Question : – Green Ltd has 14000 8 % Debentures of Rs 30 each ,Which are outstanding on 1st April 2016 ,due for redemption on 31st March 2017 .The amount of investment required in specified securities will be:

Company Accounts – Redemption of Debentures Class 12 Notes Accountancy in PDF are available for free download in myCBSEguide mobile app. Redemption of Debentures: Case # 1.
(1) Debenture Redemption Reserve: DRR is a reserve created out of profits for redeeming debentures.

3. The term "debenture" is more descriptive than definitive. Debenture holders have no rights to vote in the company's general meetings of shareholders, but they may have separate meetings or votes e.g.

The amount which is credited to the debenture redemption reserve must not be utilised by the company itself except for the purpose of redemption of debentures.