Important Notes for Redemption of Debentures The profit or loss on redemption of debentures, disclosed in the debenture redemption account, is the difference between the price paid on redemption and the nominal value. As the price paid on redemption includes accrued debenture interest, an adjustment made debiting debentures interest account and crediting debentures redemption account with the accrued...
Sunday, October 31, 2010
Monday, October 18, 2010
(215)-REDEMPTION OF DEBENTURES
Redemption of Debentures Debentures may be irredeemable; but this unusual, except in companies formed under special act of parliament. Debentures may be redeemed either at the end of a given period or by annual drawings. The trust deed, or if there is no trust deed, then the debentures themselves, will contain provision for redemption and will unusually stipulate the establishment of a sinking fund...
Sunday, October 17, 2010
(214)-DEBENTURE ISSUES
Debenture Issues Debentures issued at a premium When debentures are issued at a premium, debenture account is credited with the nominal amount and debenture premium account with the premium. Debenture premium account can be shown in the balance sheet as a revenue reserve. The companies act does not specify the uses of the debenture premium account. Debenture issued at a discount Debenture can be issued...
Monday, October 11, 2010
(213)-DEBENTURES OF A COMPANY
Debentures of a CompanyA debenture is a written acknowledgement of a debt by a company, usually under seal and generally containing provision for payment of interest and repayment of capital; a simple or naked debenture carries no charge on assets; a secured debenture carries either a fixed charge on a specific asset or a floating charge an all or some of the assets. All form of loan stock is debentures.A...
Friday, October 8, 2010
(212)-RESERVES AND PROVISIONS
Reserves and ProvisionsReserves The term reserves may include the following:Reserves created by means of appropriation from profit and loss account.The reserves referred to below be voluntary reserves, the amounts transferred are at the discretion of the directors. These reserves may include following:General reserveFixed asset replacement reserveStock replacement reserveDebenture reserveThere is...
Monday, October 4, 2010
(211)-ISSUE OF SHARES
Issue of SharesWhenever an allotment of shares is made, an entry should be made in the journal, debiting an application and allotment account with the amount payable on application and allotment in respect of the shares so allotted, and crediting share capital account. If more than one class of capital is being issued, separate accounts must be opened in the ledger for each class.Similar entries must...
Friday, October 1, 2010
(210)-SHARE CAPITAL OF A COMPANY
Share Capital of a CompanyThe most common class of share capital is ordinary shares which carry votes. In principle a company may have more than one class of shares, including:Voting ordinary shares which carry the right to vote on all matters and to participate in surplus profits or surplus assets on liquidation.Non-voting ordinary shares which have similar rights as for above except that the ability...
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