Understanding Redemption of Debentures and Payment of Interest

The video tutorial covers the redemption of debentures, including journal entries, interest calculations, and tax implications. It explains the process of debenture redemption, the creation of journal entries for debenture transactions, and the calculation of interest and tax. The session concludes with a summary and tips for handling debentures effectively.

What does the redemption of debentures signify for a company?

• Increasing company liabilities

• Repayment of debenture amount

• Issuing new shares

• Paying dividends to shareholders

Leslie Limited issued debentures at a discount. What is the discount percentage?

• 20%

• 10%

• 5%

• 15%

What is the total loss on debentures for Leslie Limited due to issuing at a discount and redeeming at a premium?

• ₹40,000

• ₹30,000

• ₹20,000

• ₹50,000

How often is the debenture interest paid by Leslie Limited?

• Quarterly

• Annually

• Half-yearly

• Monthly

What is the tax deducted at source percentage for the debenture interest?

• 20%

• 15%

• 10%

• 5%

In the balance sheet, where is the premium on redemption of debentures recorded?

• Liability side

• Income statement

• Asset side

• Equity side

What is the importance of writing a narration below each journal entry?

• To increase the length of the document

• To provide a clear explanation of the entry

• To confuse the reader

• To comply with legal requirements