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Joint Stock Company Accounts : Redemption of Debenture

ICSE · Class 12 · Accountancy

Complete topic list for Joint Stock Company Accounts : Redemption of Debenture in ICSE Class 12 Accountancy. Key concepts, sub-topics, and what to focus on for board exams.

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4 Topics · ICSE Class 12 Accountancy

Topics in Joint Stock Company Accounts : Redemption of Debenture

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1. Meaning and Concept of Redemption of Debentures

  • Redemption refers to repayment of debenture amount to debentureholders
  • It discharges the company's liability on account of debentures issued
  • Terms and conditions of redemption are specified in the debenture certificate
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2. Methods of Redemption of Debentures

  • Method 1: Redemption in a lump sum - all debentures repaid at once after fixed period
  • Method 2: Redemption in annual instalments by draw of lots - repaid in equal/unequal annual parts, selected by lottery
  • Method 3: Redemption by purchase in open market - company purchases own debentures from stock exchange and cancels them
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3. Legal Requirements - Debenture Redemption Reserve (DRR)

  • Section 71 of Companies Act 2013 mandates creation of Debenture Redemption Reserve
  • Minimum 25% of debenture amount must be transferred to DRR before redemption starts
  • DRR is created from surplus available for dividend
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4. Journal Entries at Time of Issue

  • Entry 1: Record application money received
  • Entry 2: Adjust application money against debentures and record premiums/discounts
  • Premium on issue goes to Securities Premium Reserve

Key Concepts

Redemption refers to the repaymentThere are three primary methodsAs per Section 71(4) of CompaniesAs per Rule 18(7)(c) of CompaniesAt issue

Frequently Asked Questions

What are the important topics in Joint Stock Company Accounts : Redemption of Debenture for ICSE Class 12 Accountancy?
Joint Stock Company Accounts : Redemption of Debenture covers several key topics that are frequently asked in ICSE Class 12 board exams. Focus on the core concepts listed on this page and practise related questions to build confidence.
How to score full marks in Joint Stock Company Accounts : Redemption of Debenture — ICSE Class 12 Accountancy?
Start by understanding all key concepts. Practise previous year questions from this chapter. Revise formulas and definitions regularly. Use flashcards for quick revision before the exam.

Sources & Official References

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

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