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 -------
Option 1: Out of capital
Option 2: Out of profit
Option 3: Both 1 and 2
Option 4: None of the above
Answer (1)
25th Jan, 2024
Correct Answer: Out of profit
Solution : Answer = Out of profit
If the debentures are redeemed out of the profit the amount equivalent to the nominal (face) value of outstanding debentures to the Debentures Redemption Reserve (DRR).
Hence, the correct option is 2.
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