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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Get complete step-by-step solutions for T.S. Grewal Class 12 Vol 2 2025-2026 - Chapter 3 - Redemption of Debentures. Study double-entry system details, practice timed problems, and verify answers directly.
Star Ltd. is a manufacturer of chemical fertilizers. Its annual turnover is ₹50 crores. The company had issued 5,000, 12% Debentures of ₹500 each at par. Calculate the amount of Debenture Redemption Reserve which needs to be created to meet the requirements of law.
Face value of debentures = 5,000 × ₹500 = ₹25,00,000
Amount required to be transferred to Debenture Redemption Reserve (DRR) = 25% of Face Value of Debentures
= 25% of ₹25,00,000 = ₹6,25,000
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