Meaning of Redemption of Debentures
Redemption of debentures means repayment of debenture to the debenture holders by the company after a specified period of time. Debenture is a liability to the company so when the company redeems the debentures, the liability of the company is being reduced. Debentures can be : –
- Issued either at par and can be redeemed at par.
- Issued either at par and redeemed at premium.
- Issued at premium and redeemed at par.
- Issued at premium and redeemed at premium.
Debentures can be redeemed either out of capital or out of profit.