Company Accounts

Debentures

Medium

After the debentures are redeemed, the balance in the Sinking Fund Account is transferred to:

capital reserve

general reserve

profit and loss account

secret reserve

✅ Correct Option: 2

The Sinking Fund (also known as Debenture Redemption Fund) is created out of profits for redemption of debentures. Once the debentures are fully redeemed, the balance in the fund is no longer required for a specific purpose and is transferred to General Reserve, becoming available as a free reserve.

2026: 23 May Shift 2

Which of the following is not correct with regard to debentures:

2026: 13 May Shift 1

Observe the below given Journal Entry :-

Particulars	Dr. ₹	Cr. ₹
Debenture Application & Allotment A/c Dr.	4,70,000
Loss on Issue of Debenture A/c Dr.	70,000
To 8 % Debenture A/c		5,00,000
To Premium on Redemption of Debenture A/c		40,000

Debentures are :-

2025: 14 May Shift 2

XYZ Ltd. purchased assets worth Rs. 3,00,000 from Blue Prints Ltd., and took over its liabilities worth Rs. 20,000 for a purchase consideration of Rs. 3,15,000. XYZ Ltd. paid the purchase consideration by issuing 12% debentures of Rs. 100 each at a premium of 5%.

How many debentures would be issued, if debentures were issued at par?

2026: 11 May Shift 1

X Ltd issued Rs. 5,00,000, 9% debentures of Rs. 100 each at a premium of 5% and these debentures are redeemable at a premium of 5%. What amount should be debited to Loss on Issue of Debenture Account?

2025: 26 May Shift 2

Match List-I with List-II

List-I	List-II
(A) Unregistered Debentures	(I) Perpetual Debentures
(B) Unsecured Debentures	(II) Naked Debentures
(C) Secured Debentures	(III) Bearer Debentures
(D) Irredeemable Debentures	(IV) Mortgage Debentures

Choose the correct answer from the options given below:

2026: 6 June Shift 1

Debentures of Rs. 5,00,000 is issued at a discount of 10% and redeemable at a premium of 10%. What will be the loss on issue of debentures?

After the debentures are redeemed, the balance in the Sinking Fund Account is transferred to:

Solution

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