Question:
Balance of Debenture Redemption Reserve is transferred to which account after the redemption of all debentures?
Balance of Debenture Redemption Reserve is transferred to which account after the redemption of all debentures?
Show Hint
After redemption of debentures, DRR balance is transferred to General Reserve.
Updated On: Jul 4, 2025
- Profit and Loss Account
- Capital Reserve Account
- General Reserve Account
- Statement of Profit and Loss
Hide Solution
Verified By Collegedunia
The Correct Option is C
Solution and Explanation
Debenture Redemption Reserve (DRR) is a statutory reserve created by companies under the Companies Act to ensure the redemption of debentures.
Once all debentures are redeemed, the purpose of the DRR is fulfilled. As per accounting treatment, any remaining balance in the DRR is transferred to the General Reserve Account. This is because General Reserve is a free reserve that can be used by the company for any general purpose.
Once all debentures are redeemed, the purpose of the DRR is fulfilled. As per accounting treatment, any remaining balance in the DRR is transferred to the General Reserve Account. This is because General Reserve is a free reserve that can be used by the company for any general purpose.
Was this answer helpful?
0
0
Top Questions on Debentures
- Prime Ltd. took over assets of ₹ 6,00,000 and liabilities of ₹ 1,00,000 of Rabi Ltd. for a purchase consideration of ₹ 3,60,000. Prime Ltd. issued 10% debentures of ₹ 100 each at a discount of 10% in full satisfaction of purchase consideration.
Pass necessary journal entries in the books of Prime Ltd. - Delight Ltd. purchased assets worth ₹ 4,00,000 and took over liabilities of ₹ 70,000 of Marvel Ltd. for a purchase consideration of ₹ 3,60,000. Delight Ltd. paid the purchase consideration by issuing 11% debentures of ₹ 100 each at a premium of 20%.
Pass necessary journal entries in the books of Delight Ltd. - Moon Ltd. issued 4,000, 10% debentures of ₹ 100 each at a premium of 10% redeemable at par after 5 years.
Pass journal entries in the books of the company for issue of debentures. - Pass necessary journal entries for issue of debentures for the following transactions:
(i) Kiero Ltd. issued 80,000, 9% debentures of ₹ 100 each at par, redeemable at a premium of 10%.
(ii) Naro Ltd. issued 50,000, 10% debentures of ₹ 100 each at a premium of 5%, redeemable at a premium of 10%. - On 1st April 2023, Veebee Ltd. issued 20,000, 13% debentures of \( ₹ 100 \) each at a discount of 10% redeemable at a premium of 5% after 4 years. Total amount of interest on debentures for the year ending 31st March, 2024 will be :
View More Questions
Questions Asked in CBSE CLASS XII exam
- If \( \mathbf{a} \) and \( \mathbf{b} \) are position vectors of two points \( P \) and \( Q \) respectively, then find the position vector of a point \( R \) in \( QP \) produced such that \[ QR = \frac{3}{2} QP. \]
Following is the extract of the Balance Sheet of Vikalp Ltd. as per Schedule-III, Part-I of Companies Act as at $31^{\text {st }}$ March, 2024 along with Notes to accounts:
Vikalp Ltd.
Balance Sheet as at $31^{\text {st }}$ March, 2024
Particulars Note No. $31-03-2024$ (₹) $31-03-2023$ (₹) I. Equity and Liabilities (1) Shareholders Funds (a) Share capital 1 59,60,000 50,00,000 ‘Notes to accounts’ as at $31^{\text {st }}$ March, 2023:
Note Particulars $31-3-2023$ (₹) No. 1. Share Capital : Authorised capital 9,00,000 equity shares of ₹ 10 each 90,00,000 Issued capital : 5,00,000 equity shares of ₹ 10 each 50,00,000 Subscribed capital : Subscribed and fully paid up 5,00,000 equity shares of ₹ 10 each 50,00,000 Subscribed but not fully paid up Nil 50,00,000 ‘Notes to accounts’ as at $31^{\text {st }}$ March, 2024:
Note Particulars $31-3-2024$ (₹) No. 1. Share Capital : Authorised capital 9,00,000 equity shares of ₹ 10 each 90,00,000 Issued capital : 6,00,000 equity shares of ₹ 10 each 60,00,000 Subscribed capital : Subscribed and fully paid up 5,80,000 equity shares of ₹ 10 each 58,00,000 Subscribed but not fully paid up 20,000 equity shares of ₹ 10 each, fully called up 2,00,000 Less : calls in arrears 20,000 equity shares @ ₹ 2 per share 40,000 59,60,000 - The total face value of equity shares issued during the year 2023-2024 was :
- The number of shares on which the called up amount was not received were :
- On $1^{\text {st }}$ April, 2024 Vikalp Limited forfeited all the shares on which the called up amount was not received. On forfeiture, ‘Share Capital Account’ will be debited by :
- On forfeiture, ‘Share Forfeiture Account’ will be credited with :
- If all the forfeited shares are reissued at ₹ 8 per share fully paid up, the amount credited to ‘Capital Reserve A/c’ will be :
- If the forfeited shares are reissued at the minimum permissible price, the amount credited to ‘Capital Reserve Account’ will be :
- CBSE CLASS XII - 2025
- Balance sheet statement
- PL Ltd. offered 90,000 equity shares of ₹ 10 each. Applications received = 82,000 shares. All money received except final call ₹ 2 per share on 2,000 shares allotted to Atishay. His shares were forfeited.
- CBSE CLASS XII - 2025
- Accounting for Share Capital
Aryan and Adya were partners in a firm sharing profits and losses in the ratio of 3 : 1. Their Balance Sheet on 31st March, 2024 was as follows :
Balance Sheet (Before Dev's Admission)
Liabilities Amount (₹) Assets Amount (₹) Capital: Aryan 3,20,000 Machinery 3,90,000 Capital: Adya 2,40,000 Furniture 80,000 Workmen’s Compensation Reserve 20,000 Debtors 90,000 Bank Loan 60,000 Less: Provision for Doubtful Debts (1,000) Creditors 48,000 Net Debtors 89,000 Stock 77,000 Cash 32,000 Profit and Loss A/c 20,000 Total ₹6,88,000 Total ₹6,88,000 Note:
- Dev was admitted on 1st April 2024 for 1/5th share in profits.
- Adjustments on admission included:
- Revaluation of Machinery
- Provision for Doubtful Debts created
- Goodwill brought in cash
- A liability of ₹3,500 was not likely to arise and to be written back
- CBSE CLASS XII - 2025
- Admission of a Partner
- ‘A’, ‘B’ and ‘C’ were partners in a firm. On 1st April, 2023, their capitals stood at 50,000, 25,000 and 25,000 respectively. As per the provisions of the partnership deed :
C was to be given a commission of ₹ 5,000 p.a.
Interest on capital was to be allowed @ 10% p.a.
A was to be given a salary of ₹ 1,000 p.m.
The net profit of the firm for the year ended 31st March, 2024 before providing for any of the above was ₹ 75,000. The net profit to be distributed among partners will be :- CBSE CLASS XII - 2025
- Partnership
View More Questions