SELECT * FROM question_mgmt as q WHERE id=10818 AND status=1 SELECT id,question_no,question,chapter FROM question_mgmt as q WHERE courseId=3 AND subId=51 AND chapterId=358 and ex_no='2' AND status=1 ORDER BY CAST(question_no AS UNSIGNED)

Question:

Describe the steps for creating Sinking Fund for redemption of debentures.

Answer:

The steps involved in creation of Sinking Fund on redemption of Debenture are: 

(i) Calculate the amount of profit to be set-aside annually with the help of sinking fund table. 

(ii) Set aside the amount of profit at the end of each year and credit to Debenture Redemption Fund (DRF) Account. 

(iii) Purchase the investments of the equivalent amount at the end of first year and debit Debenture Redemption Fund Investment (DRFI) Account. 

(iv) Receive interest on investment at the end of each subsequent year. 

(v) Purchase the investments equivalent to the fixed amount of profit set aside and the interest earned every year except last year (year of redemption). 

 

(vi) Receive interest on investment for the last year. 

 

(vii) Set aside the fixed amount of profit for the last year. 

(viii) Encash the investments at the end of the year of redemption. 

(ix) Transfer the profit/loss on sale of investments reflected in the balance of Debenture Redemption Fund Investment Account to Debenture Redemption Fund Account. 

(x) Make payment to debenture holders. 

(xi) Transfer Debenture Redemption Fund A/c balance to General Reserve.


< Previous Question

Next Question >

SELECT ex_no,question,question_no,id,chapter FROM question_mgmt as q WHERE courseId='3' AND subId='51' AND ex_no!=0 AND status=1 and id!=10818 ORDER BY views desc, last_viewed_on desc limit 0,10

  • Popular questions of class 12 Accountancy - Company Accounts and Analysis of Financial Statements

SELECT ex_no,question,question_no,id,chapter FROM question_mgmt as q WHERE courseId='3' AND subId='51' AND ex_no!=0 AND status=1 and id!=10818 ORDER BY last_viewed_on desc limit 0,10

  • Recently Viewed Questions of Class 12 Accountancy - Company Accounts and Analysis of Financial Statements

Comments

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

  • Answered by Ekta Mehta
  • 4 months ago

Taking Screenshots on your Samsung Galaxy M31s is very easy and quick.

Comment(s) on this Question


Important links

Quick Links

Resources

Support