Question

Difference between redemption of debenture out of capital and out of profit

Answer 1

Redemption of Debentures: Sources and Methods!

Redemption of debentures means payment of the amount of debentures by the company. When debentures are redeemed, liability on account of debentures is discharged. Amount of funds required for redemption of debentures is quite large and, therefore, prudent companies make sufficient provision out of profits and accumulate funds to redeem debentures.

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