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Dow Ltd. Issued Rs. 2,00,000, 8% Debentu...

Dow Ltd. Issued Rs. 2,00,000, `8%` Debentures of Rs. 10 each at a premium of `8%` on 30th June, 2016 redeemable on 31st March, 2018. How much amount should be transferred to Debentures Redemption Reserve before redemption of debentures ?

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Verified by Experts

The correct Answer is:
An amout equal to at least `25%` of nomial value of debentures outstanding, i.e. Rs 50,000 is required to be transferred to DRR.
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TS GREWAL-COMPANY ACCOUNTS REDEMPTION OF DEBENTURES-EXERCISE
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