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Why we need to create own debentures investment account??

Accountancy

Purchase of debentures Own debentures a/c Dr To bank a/c. Then Cancellation of own debentures X%debentures a/c Dr To own debentures ANYWAY ITS CANCEL EACHOTHER, then why we want create own debentures account WE CAN USE THE TERM AS REDEMPTION??? same treatment as redemption and own debentures also why we treat as own debentures??

Kanaga Mani

CA Inter

★ 3K+

04-Jun-20 18:18

384

Answers (3)

Please reply

K Ashwathy

CA Inter

★ 170

04-Jun-20 22:03

Separate accounts are required because, (1) purpose for which it is purchased is different I.e like for investment purpose and not for repayment of debt (2) we can hold the investment till cancellation and we might not buy only part of debentures if profitable (3) we have to account profit on such transactions (4) separate accounts help track full transaction