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REDEMPTION OF DEBENTURES

Accountancy

WHEN ISSUING DEBENTURES AT PAR AND REDEEMING AT PREMIUM THE ENTRY WILL BE DEBENTURE APPLICATION A/C DR 1000 LOSS ON DEBENTURE AC DR 100 TO DEBENTURE A/C 1000 TO PROVISION FOR 100 PREMIUM ON REDEMPTION OF DEBENTURE A/C FROM WHERE DID THE ADDITIONAL AMOUT OF 100 CAME BECUASE AT ISSUE WE ARE ASKING FOR 1000 ONLY???? Video Details ------------- Accounting - CA Foundation (New) Redemption of Debentures #2. Journal Entries - Issue

Prathmesh Kharul

CA Foundation

★ 6K+

18-May-24 22:54

Answers (2)

Itw Simple.. Example : I need a money of 1000 right now.. And u gave me.. right away i said i will repay this amount after 2 years... Now think for yourself... Now while I am repaying i will give you 1000rs only... Will you accept it... The answer is no..... you will ask for extra money which is over and above the. 1000 Rs..... . The same way When a company wants money , They will issue an debenture at par.. let's say 1000 Rs.. And while repaying They will give back extra amount which is called as an premium on redemption of debtenutes....... I hope u got it. 😇

Balachandar S

CA Inter

★ 59K+

19-May-24 04:55

We asked 1000 But we have to pay back 1100 So extra 100.

CA Suraj Lakhotia

Admin

20-May-24 13:57

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