Debenture Replace Calculations For Free

The resolution for Conversion of Debentures into Equity Shares should be approved in the Board Meeting. The approval of shareholders, as well as Debentures Holders, is taken for the Conversion. After passing of the Board Resolution, the notice for General Meeting should be passed.

While shares represent a portion of ownership in a company and entitle the shareholder to a share of the company's profits, debentures are debt instruments that offer fixed interest income to the investor and have priority over shareholders in terms of repayment in case of bankruptcy or liquidation.

New equity shares can be issued to the debenture-holders at par, at discount or at premium when the conversion of debentures into equity shares process will be start. Liability of debentures which we are converting will not increase or decrease in case issue of shares at discount or at premium.

Solution. Fully convertible debentures are converted into equity shares on maturity.

If debenture holders find that the offer is beneficial to them they may convert his/her debentures into shares or new debentures after the expiry of a specified period of time, then this whole process is known as redemption of debentures by conversion.

On conversion of debentures, the debenture holders become shareholders, and get dividends on shares, and exercise their right to vote in the company's general meeting. 3. The converted shareholders also get benefits when there is an appreciation in the value of their shares.

Debentures are converted into equity shares on maturity. The conversion date and rate of conversion is stated in the prospectus.

The rate of interest is a prefix value to the debenture, say 9% Debentures and, therefore, is payable even if the company incurs a loss. It is a charge against profit.We show Interest on Debentures as 'Finance Cost' in Statement of Profit and Loss.

There are different journal entries in connection with the issue of debentures: On the receipt of Application Money. On allotment, the application money on debentures allotted is transferred to debentures account. Amount Due on Allotment (Along with Premium)

In the company's balance sheet, debentures are shown under the head .