Question : Debentures are redeemed without setting aside an amount to Debentures Redemption Reserve (DRR). It is called redemption ________.
Option 1: Out of capital
Option 2: Out of profit
Option 3: Both 1 and 2
Option 4: None of the above

Question

Question : Debentures are redeemed without setting aside an amount to Debentures Redemption Reserve (DRR). It is called redemption ________.

Option 1: Out of capital

Option 2: Out of profit

Option 3: Both 1 and 2

Option 4: None of the above

Team Careers360 · Accepted Answer

Correct Answer: Out of capital

Solution : Answer = Out of capital.

If debentures are redeemed out of capital, then there is no need to create DRR. In this case, Debentures are redeemed without setting aside an amount to Debentures Redemption Reserve.
Hence, the correct option is 1.

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Question : Debentures are redeemed without setting aside an amount to Debentures Redemption Reserve (DRR). It is called redemption ________.Option 1: Out of capitalOption 2: Out of profitOption 3: Both 1 and 2Option 4: None of the above

Related Questions

Question : When Debentures are redeemed setting aside amount equivalent to nominal (face) value of outstanding debentures to Debentures Redemption Reserve (DRR). It is known as redemption -------

Question : When Debentures are redeemed setting aside 10% of nominal (face) value of outstanding debentures to Debentures Redemption Reserve (DRR) known as redemption out of --------

Question : In the lump sum method after redemption of debentures Amount of Debentures Redemption Reserve (DRR) is transferred to _________.

Question : After redeeming the debentures, in part or total outstanding debentures, amount of DRR relating to debentures redeemed is transferred to-------

Question : Choose which of the following statements is true?

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Question : Debentures are redeemed without setting aside an amount to Debentures Redemption Reserve (DRR). It is called redemption ________.
Option 1: Out of capital
Option 2: Out of profit
Option 3: Both 1 and 2
Option 4: None of the above