Question

What are the methods that are followed while redeeming a debenture?

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Answer 1

Methods that are followed while redeeming a debenture are,

Redemption of Debentures in a Lump sum on maturity

Redemption of Debentures out of the capital

Redemption of Debentures out of cash

Answer 2

Answer:

hey dear ...

Debentures are debt instruments. Hence when their period expires, debenture holders are paid back their principal amount. This process of discharging the company’s debt is known as the redemption of debentures. Let us learn more about the various methods of redemption of debentures and their accounting treatments.

Redemption of debentures refers to the repayment of these debentures by the company to the debenture holders. So the company will discharge its liability and remove it from the balance sheet. This is a major transaction for the company since the amount of money involved tends to be quite significant.

There are a few ways in which this redemption of shares can take place. These methods all have different accounting treatment as well. So let us take a look at the various methods of redemption of debentures.

hope it's helpful for you.

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