Question

multiple choice question:
profit on cancellation of own debentures is transferred to : (a) surplus in statement of profit and loss (b) own debentures account (c) capital reserve account (d) none of these​

Answer 1

Since profit on redemption of debentures is a Capital Profit, the same should be transferred to Capital Reserve Account. An amount equal to the nominal value of the debentures cancelled should be transferred to Capital Reserve out of profits.

option c