Redemption of Debentures MCQs
1. As per SEBI Guidelines an amount equal to ………………….. of the debenture issue must be transferred to Debenture Redemption Reserve before redemption begins.
(A) 25%
(B) 80%
(C) 50%
(D) 100%
Answer
Answer: C
2. A company issuing debentures with a maturity period of not more than 18 months, in that case the creation of Debentures Redemption Reserve will be :
(A) 50% of the amount of debentures issued
(B) 25% of the amount of debentures issued
(C) 100% of the amount of debentures issued
(D) None of the above
Answer
Answer: D
3. According to the guidelines issued by Securities and Exchange Board of India (SEBI) what percentage of the amount of debentures must be transferred to ‘Debentures Redemption Reserve’ before the commencement of redemption of debentures, in case of convertible debentures?
(A) 25%
(B) 50%
(C) 100%
(D) Zero
Answer
Answer: D
4. A Ltd. wants to redeem 5,000, 5% Debentures of ₹100 each at 5% premium. How much amount it must transfer to Debenture Redemption Reserve, if it has already a balance of ₹1,00,000 in Debenture Redemption Reserve Account?
(A) 4,00,000
(B) 1,50,000
(C) 2,00,000
(D) 2,50,000
Answer
Answer: B
5. A Company issuing debentures with a maturity periof of not more than …………….. need not create Debenture Redemption Reserve.
(A) 2 months
(B) 6 months
(C) 12 months
(D) 18 months
Answer
Answer: D
6. Where is ‘Debenture Redemption Reserve’ transferred after the redemption of all debentures?
(A) Capital Reserve Account
(B) General Reserve Account
(C) Statement of Profit and Loss
(D) Sinking Fund Account
Answer
Answer: B