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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Question 02 Chapter 10 of +2-A
2. Young India Ltd. had issued the following debentures:
(a)1,00,000, 10% fully convertible debentures of 100 each on 1st April 2016 redeemable by conversion after 5 years.
(b)20,000, 10% Debentures of 100 each redeemable after 4 years, 25% Debentures in Cash and 75% by conversion.
State the amount of DRR required to be created as per the Companies Act,2013.
a. There is no need for the creation of DRR because these debentures are fully convertible.
b DRR would be created for non-convertible part of debentures.
Amount Required to be transferred to DRR = 25% of Face value of Debentures(Non-convertible)
= 25% of Rs 5,00,000(20,00,000 × 25%) = Rs1,25,000
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
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