Question

Arrange the following in the correct sequence in the context of debenture:
(A) Payment to debenture-holders
(B) Creation of DRR
(C) Issue of debentures
(D) Redemption becomes due.

• A. (A), (B), (C), (D)
• B. (A), (C), (B), (D)
• C. (B), (A), (D), (C)
• D. (C), (B), (D), (A)

Answer 1

The Correct Option is D

Let’s analyze the process step by step in the context of debenture: 

1. Issue of debentures (C):

The first step in the debenture process is the issue of debentures. This is when the company offers debentures to the public or specific investors to raise funds.

2. Creation of DRR (B):

Once the debentures are issued, the company is required to create a Debenture Redemption Reserve (DRR). This is a fund set aside for the purpose of redeeming the debentures in the future.

3. Redemption becomes due (D):

After a certain period, the debentures will mature, and the redemption becomes due. This is when the company is obligated to redeem the debentures as per the terms of the issue.

4. Payment to debenture-holders (A):

The final step is the payment to the debenture-holders. This happens after the redemption becomes due, where the company repays the principal amount and any applicable interest to the debenture-holders.

Conclusion: The correct sequence of events is:

(C), (B), (D), (A)

Answer 2

The correct sequence is: (C) Issue of debentures → (B) Creation of Debenture Redemption Reserve (DRR) → (D) Redemption becomes due → (A) Payment to debenture holders. 
Hence, the correct answer is Option 4.