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Difference between Debenture Redemption Reserve and Capital redumption Reserve?
Wiki User
∙ 14y ago
The Capital Redemption Reserve is a fund that secures a creditor. Debenture Redemption Reserve is for the purpose of security payments only.
Wiki User
∙ 9y ago
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Examine Debenture can be redeemed only out of capital?
No Debentures can not be redeemed out of capital only. Gov of India and SEBI has indirectly placed restrictions on redemption of debentures. Now it is compulsory to create Debenture Redemption Reserve at-least 50% of the debentures issued.
Why premium on redemption of debenture credit at the time of issue of debenture?
It is capital loss of the company. It comes only in the time when redeem debenture. It is shown when we issue the debenture because it is one of the redeemable condition. it is loss of future but comes in balance sheet as separate account the name of premium redemption account in liability side so, it is carried at the time of issue.
Define redemption of debentures out of capital?
When debentures are redeemed out of capital, no transfer is made to general reserve or debenture redemption reserve account. In this method it is assumed that the company has sufficient funds to redeem the debentures. So the profits are not utilised to replace the debentures.It affects adversely to the Working Capital of the company.
What are the disadvantages of debenture capital?
High Denominations People can Buy the Debenture Certificate and can not buy other people.
Why is capital redemption reserve created?
No
What is capital redemption reserves?
Capital Redemption Revere is an reserve created when a company buys it owns shares which reduces its share capital. This reserve is not distributable to shareholders and can be used to pay bonus shared issued.
How can a company rise capital?
Company can mainly raise its capital by issuing equity or debt instrument e.g stocks bonds preference share debenture loans etc
How is capital redemption reserve created?
from undistributable profits to shareholders
What are the Merits and demerits of debentures?
Hi merit of dbenture - trading on equity is possible as debenture holders get a lower rate of return than the earnings of the company. demerit of debenture-cost of raising capital through debentures is high of high stamps duty.
Why debentures are not forfeited?
debenture is a loan to company and its face value will be higher moreover it carries fixed interest which is charge against profits.so there is no chance from the side of debenture holder for non payment of calls after repeated notices from the company. from the view point of company it cannot forfiet a debenture and treat it as a capital profit because they are not owners is this explanation coreect for that question?
What source of capital would minimize the cost of capital to a subsidiary?
long term debenture will certainly minimise the cost of capital due to low interest and longer time frame to return the loan (more time to plan and to get return)...
Do the red dead redemption cheats on Playstation 3 have to be in capital letters?
i think no
