If the debentures are to be redeemed in instalments, the redemption is made out of ___
None of these
Profits or Capital
Capital
Profits
The redemption of debentures is to be made either out of profits or out of capital.
What entries for the redemption of debentures will be done when : (a) debentures are redeemed by annual drawings out of profits; (b) debentures are redeemed by drawing a lot out of capital; and (c) debentures are redeemed by purchasing them in the open market when sinking fund for the redemption of debentures is not maintained − (i) when out of profit, and (ii) when out of capital?
Differentiate between redemption of debentures out capital and out of profits.