plsz explain in detail redemption by draw of lots with a lot of examples

Asked by Diksha | 24th Mar, 2017, 10:23: PM

Expert Answer:

Redemption of Debentures by Draw of Lots is a method under which the company may redeem its debentures in instalments each year and debentures to be redeemed are selected by draw of lots, that is, lottery method. The Accounting treatment is similar to the one followed incase debentures are redeemed in lumpsum with a difference in amount of debentures are redeemed in parts. The phases of recording include passing the accounting entry for issue of debentures, creation of DRR, redemtion in instalments and finally transfer of DRR to General Reserve. 

Answered by Tharageswari S | 25th Mar, 2017, 12:28: PM