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Redemption of debentures, practical qn 3
Accountancy
Sir , usually in DRR ac we will transfer the balance amount of general reserve. But in this sum, it's quite different. They are transferring only 10% to general reserve. Why aren't they transferring balance amount to general reserve
Answers (4)
Thread Starter
Nandhini Ramesh3rd qn
Because Creation of DRR for unlisted companies (residuary) is 10% of maturing debenture of the year ending that should be created as per the provisions. Refer theory section of icai material properly
We transfer back the amount of DRR to General Reserve when all debentures have been redeemed. Here debentures are still outstanding - they have just cancelled few.. So, w.r.t. 8,000 debentures, the amount of DRR which was created, they are just transferring that back
