Assertion (A): In case ₹ 20,00,000, 8% debentures are outstanding and one-fifth of these debentures are to be redeemed, transfer to DRR will be ₹ 40,000. Reason (R): In such case, amount invested in Debenture Redemption Investment will be ₹ 60,000. In the context of the above two statements, which of the following is correct?

Question

KollegeApply · Accepted Answer

(A) is incorrect but (R) is correct. Explanation: 1. 10% of ₹ 4,00,000 (one-fifth of ₹ 20,00,000) equals ₹ 40,000, but DRR is not required for listed companies. 2. 15% of ₹ 4,00,000 = ₹ 60,000 must be invested in Debenture Redemption Investment as per the rule.

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