Skip to main content
Super TutorResources
Chapter 9 of 10
Revision Notes

Joint Stock Company Accounts : Redemption of Debenture — Revision Notes

ICSE · Class 12 · Accountancy

Joint Stock Company Accounts : Redemption of Debenture revision notes for ICSE Class 12 Accountancy: 4 topics in quick points.

44 questions38 flashcards4 formulas & key relations5 concepts

Interactive on Super Tutor

Studying Joint Stock Company Accounts : Redemption of Debenture? Get the full interactive chapter.

Quizzes, flashcards, AI doubt-solver and a step-by-step study plan — built for revision notes and more.

Try Super Tutor — Free

Free trial, no card needed.

Key Topics to Revise

1

1. Meaning, methods, and sources of redemption

  • Redemption of debentures means repayment of debenture amount to the debentureholders.
  • The terms and conditions of issue and redemption of debentures are specified in the debenture certificate.
  • Main methods of redemption are: redemption in a lump sum, redemption in annual instalments by draw of lots, and redemption by purchase in the open market.
2

2. Debenture Redemption Reserve and legal rules

  • Debenture Redemption Reserve is a reserve retained out of profits available for dividend for redeeming debentures before redemption begins.
  • Debenture Redemption Reserve appears in the Balance Sheet under Shareholder’s Funds and sub-head Reserves and Surplus.
  • A company must create Debenture Redemption Reserve equivalent to at least 25% of the debentures issued before redemption commences.
3

3. Redemption through fresh issue or out of profits/capital

  • A company may redeem debentures from the proceeds of fresh issue of shares or debentures.
  • Redemption from fresh issue does not affect the financial position of the company in the same way as using current resources.
  • Redemption out of capital uses current resources and can weaken working capital.
4

4. Accounting entries for issue and redemption of debentures

  • At issue, Bank A/c is debited and Debenture Application and Allotment A/c is credited when money is received.
  • When debentures are issued at a discount, Discount on Issue of Debentures A/c is debited.
  • When debentures are issued at a premium, Securities Premium Reserve A/c is credited.

Get complete notes with diagrams and examples

Full Notes

Key Concepts

Redemption of debentures means repaymentThe three methods are redemptionAll debentures are redeemed atThe total amount of debenturesA company

Frequently Asked Questions

What are the important topics in Joint Stock Company Accounts : Redemption of Debenture for ICSE Class 12 Accountancy?
Key topics in Joint Stock Company Accounts : Redemption of Debenture include Meaning, methods, and sources of redemption, Debenture Redemption Reserve and legal rules, Redemption through fresh issue or out of profits/capital, Accounting entries for issue and redemption of debentures. Study these first, then practise questions on each for the ICSE Class 12 board exam.
How should I revise Joint Stock Company Accounts : Redemption of Debenture for the ICSE Class 12 board exam?
Learn the core ideas first, then work through the 44 practice questions on Joint Stock Company Accounts : Redemption of Debenture. Revise definitions regularly and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

More resources for Joint Stock Company Accounts : Redemption of Debenture

All ICSE Class 12 Accountancy Revision Notes

For serious students

Get the full Joint Stock Company Accounts : Redemption of Debenture chapter — start free.

Quizzes, flashcards, an AI doubt solver and a study plan for ICSE Class 12 Accountancy. Free to start, no card needed.

Try Super Tutor Free
Try this chapter free