WebJan 1, 2009 · This means that if a company wants to redeem Rs. 5,00,000 debentures at 10% premium after 4 years and the investment yield a return of 5%. The amount of sinking fund installment every year will be .232012 x 5,50,000 (i.e., 5,00,000 + 10% premium) = Rs. 1,27,606.60. ADVERTISEMENTS: What is Sinking fund? WebDebenture is the long-term debt that the government and company issue to the investors to borrow their cash. There are several methods that a company can use to …
Convertible Debenture: Definition, Example, Advantages & Risks
WebAug 25, 2024 · As a debt instrument, a debenture is a liability for the issuer, who is essentially borrowing money via issuing these securities. For an investor (bondholder), … WebThe cost of issue the debenture is Rs.2 per debenture. These debentures are redeemable at par Pass necessary entries. (iv) When issued at par and redeemable at premium: ADVERTISEMENTS: (a) Bank a/c Dr. with Nominal value To Debenture application & allotment a/c (Nominal value) chinese north myrtle beach sc
Accounting Entries for Redemption of Debentures
WebPoints to remember regarding the accounting treatment of interests on debentures. It is always a deduction from the profit made by the company. It is calculated using a nominal amount and an already determined rate of interest. On Debentures that are offered in opposition to the collateral securities, the company does not pay any sort of interest. WebNov 20, 2024 · The Methods of Issue of Debenture is on the basis of the following: Issue Debenture for cash. Issue Debenture for consideration other than cash. As collateral security. 1. Issue Debenture for cash: … WebIAS 32 requires so-called “split accounting” for compound financial instruments. It means that the issuer must perform the following steps on initial recognition: Step 1: Identify the various components of the compound financial instrument. That’s obvious. chinese north platte ne