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Debenture interest example for dating

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In this article we will discuss about the Redemption of Debentures: Introduction to Redemption of Debentures 2. Ex-interest Price and Cum-interest Price 3. Debentures are invariably redeemable. The Companies Act has not laid down any conditions for the redemption of debentures. Of Debenture interest example for dating, the terms laid down for the redemption of the debentures in the prospectus at the time of issue of the debentures will have to be complied with by the company.

All the debentures may be redeemed in one lot at the end of a specified period of time or even before the expiry of the specified period of time by serving a notice to debenture-holders.

To put it simply, accrued...

The debentures may be redeemed in installments. For example one-tenth of the total debentures may be redeemed every year for ten years by draw of lots. Lot will have to be drawn every year to determine which particular debentures have to be redeemed in that particular year.

What is Accrued Interest?

A company may reserve the right to buy its debentures in the open market. If the company cancels the debentures so purchased, it will amount to redemption of these debentures. It is done when the company wants to keep open its option of reselling the debentures.

But after some time, it may decide to cancel the debentures held. After cancellation, the debentures stand redeemed and cannot be resold. The company may redeem only a part of the debentures by purchase in the open market.

The remaining debentures may be redeemed at the expiry of the stipulated period of time. When a company redeems its debentures in one lot at the expiry of a specified period of time or in installments by draw of lots, the debentures may be redeemed either at "Debenture interest example for dating" or at a premium according to the terms of issue. But if the company redeems debentures by purchase in the open market the debenture may be redeemed at a premium, at par or even at Debenture interest example for dating discount.

Debentures will be redeemed at a discount when the company is able to buy the debentures in the open market at a price lower than the face value of the debentures. By the terms of issue, the debentures may be redeemable at a premium and the company may, at the time of allotment of debentures, credit Premium on Redemption of Debentures Account with the amount of the premium payable at the time of debentures.

The company may reserve Debenture interest example for dating right of redeeming any of these debentures by purchase in the open market. If the company redeems any of such debentures by purchasing them in the open market and then cancelling them, while passing entries on cancellation, Debentures Account will be debited with face value of debentures cancelled and Premium on Redemption of Debentures Account will be debited with premium agreed to be paid on redemption according to the terms of the issue.

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