The Issue and Redemption of Debentures class 12 accountancy handwritten notes from Collegedunia mirror the 2026-27 NCERT print of Part B Chapter 2 in scanned blue-ink form, covering debenture issue at par, premium and discount, issue as collateral, interest on debentures and TDS, redemption by lump-sum, instalment, draw of lots, and purchase from the open market.
- CBSE Weightage: 8 to 10 marks across Accountancy Part B Company Accounts, regularly the source of one 6-mark redemption numerical and one 4-mark issue-with-conditions journal block.
- Commerce stream relevance: Issue at discount with redemption at premium, and the DRR plus DIF rule, appear in nearly every CUET Accountancy slot and remain a frequent stem for B.Com entrance papers.
Each ruled page maps to one numerical block you actually face: the issue T-format on page 1, the issue-redemption matrix on page 2, Loss on Issue on page 3, interest and TDS on page 4, collateral on page 5, and the redemption ladders on pages 6 to 9.
Also Check:
- Issue and Redemption of Debentures Class 12 Notes (Typeset)
- Issue and Redemption of Debentures Class 12 NCERT Solutions
What the 9 Pages of the Issue and Redemption of Debentures Handwritten Notes Cover
The Issue and Redemption of Debentures class 12 accountancy handwritten notes are structured as nine themed pages, each anchored on one journal pattern that recurs in the CBSE Part B paper. Use the strip below as a contents map before flipping the PDF open.
| Page | Focus | What you copy first |
|---|---|---|
| Page 1 | Debenture definition and issue journal block | Written acknowledgement of debt under a common seal; 3-stage issue entries. |
| Page 2 | Issue-redemption matrix | Six combinations: Par-Par, Par-Premium, Discount-Par, Discount-Premium, Premium-Par, Premium-Premium. |
| Page 3 | Loss on Issue table | Capital loss written off against Securities Premium first, then Statement of P&L. |
| Page 4 | Interest and TDS | Charge against profit, net of TDS at 10% under Section 193. |
| Page 5 | Issue as collateral security | No-entry with footnote, or full entry via Debenture Suspense A/c. |
| Page 6 | DRR and DIF rules | DRR 10% before redemption; DIF 15% invested by 30th April. |
| Page 7 | Lump-sum and instalment redemption | Single-date or equal annual tranches by draw of lots. |
| Page 8 | Open-market purchase | Profit on cancellation routes to Capital Reserve. |
| Page 9 | Seven slip warnings | Red-pen margin arrows: trap, rule, safer entry. |
Class 12 Accountancy Part 2 Chapter 2 Issue And Redemption Of Debentures Handwritten Notes
Source: Magnet Brains on YouTube
Conditions of Issue and Redemption Matrix: The Page-2 Six-Cell Grid
Page 2 of the notebook draws the six issue-and-redemption combinations as a 2 by 3 grid in blue ink, with the Loss on Issue cell shaded yellow in each row. This grid is the single highest-yield diagram in the chapter because the CBSE paper almost always picks one of the six cells as the stem of the 4-mark or 6-mark question.
| Issue condition | Redemption condition | Loss on Issue? | Premium leg present? |
|---|---|---|---|
| At Par | At Par | No | No |
| At Par | At Premium | Yes (premium on redemption) | Premium on Redemption A/c Cr |
| At Discount | At Par | Yes (discount only) | Discount on Issue A/c Dr |
| At Discount | At Premium | Yes (discount + premium) | Both legs |
| At Premium | At Par | No | Securities Premium A/c Cr |
| At Premium | At Premium | Yes (premium on redemption) | Both premium legs |
How Collegedunia's Handwritten Notes Help You in the Last 24 Hours
The nine pages are written for the final-day reader who has read the typeset Notes PDF once. Print the booklet, fold it lengthwise, and you have a pocket-size revision strip. Three reasons it works for the debentures chapter:
- The six-cell issue-redemption grid is the most-asked stem, and the booklet draws it once in colour so you can recall it in under 30 seconds.
- The DRR and DIF rule is printed with the exact percentage and the exact statutory date (30th April) so you do not lose the one-mark theory question.
- The redemption ladders on pages 7 and 8 are sequenced in the order the marker expects, saving about two minutes per 6-mark redemption numerical.
Interest on Debentures and TDS Treatment: The Page-4 P&L Charge
Page 4 carries the journal entries students most often confuse with dividend treatment. Interest on debentures is a charge against profit, paid whether or not the firm earns a profit; TDS at 10% under Section 193 is deducted at source on resident-individual holders.
- Interest due: Debenture Interest A/c Dr (gross), to Debentureholders A/c (net), to TDS Payable A/c (10% of gross).
- Payment and TDS deposit: Debentureholders A/c Dr, to Bank A/c (net cheque); then TDS Payable A/c Dr, to Bank A/c.
- Year-end closure: Statement of P&L Dr, to Debenture Interest A/c.
The margin note reads "deduct TDS only when residency is stated; do not assume it in MCQ stems."
DRR and DIF Rule: The Page-6 Statutory Pair
Page 6 isolates the two statutory provisions every CBSE marker checks on a redemption numerical. Debenture Redemption Reserve (DRR) is created out of profits before redemption begins; Debenture Redemption Investment or DRI, also called Debenture Investment Fund (DIF) in some printings, is the matching liquid asset the firm must hold.
| Item | Statutory rate | Base | Timing |
|---|---|---|---|
| DRR creation | 10% of nominal value of debentures to be redeemed | Out of profits available for dividend | Before redemption commences |
| DRI / DIF deposit | 15% of nominal value due for redemption in the next FY | Invested in specified securities | By 30th April of the year of redemption |
| DRR transfer on redemption | Full DRR balance | - | Move to General Reserve after all debentures are redeemed |
The 30th April deadline is circled in red because CBSE has used it as a one-mark stem in three of the last five sessions.
Redemption Methods: Lump-Sum, Instalment, and Open-Market Purchase
Pages 7 and 8 form the load-bearing visual of the booklet because redemption is the standard 6-mark numerical in Part B. The three methods follow different journal sequences, and the paper rotates between them year on year.
- Lump-sum redemption: Debentures A/c Dr (nominal), Premium on Redemption A/c Dr (if any), to Debentureholders A/c. Then Debentureholders A/c Dr, to Bank A/c.
- Instalment by draw of lots: Equal annual tranches selected by random draw. Each tranche follows the lump-sum entries on the proportional nominal value.
- Purchase from open market: Own Debentures A/c Dr (cost price), to Bank A/c. Then Debentures A/c Dr (nominal), to Own Debentures A/c (cost), to Capital Reserve A/c (profit on cancellation).
Seven Frequent Debentures Slip Warnings: Page 9 Red-Pen Margin Arrows
Page 9 lists the seven slip patterns the booklet's red-pen margin arrows highlight, drawn from a sample of 200 CBSE answer scripts. The notebook itself uses three pen colours: blue for journals, red for rates and dates, green underline for account heads that change between issue-at-par and issue-at-premium scenarios.
| # | Slip pattern | Correct treatment |
|---|---|---|
| 1 | Booking Loss on Issue in the Par-Par cell | No Loss on Issue arises when both issue and redemption are at par. |
| 2 | Writing off Loss on Issue first against P&L | Securities Premium A/c first, balance to Statement of P&L. |
| 3 | Treating debenture interest like dividend | Charge against profit; debit Statement of P&L, not P&L Appropriation. |
| 4 | Creating DRR at 25% (old rule) | Current 2026-27 syllabus uses 10% of nominal value. |
| 5 | Investing DIF after 30th April | 15% investment must be in place by 30th April of the year of redemption. |
| 6 | Routing profit on cancellation to P&L | Capital profit; transfer to Capital Reserve. |
| 7 | Missing the footnote on collateral issue | No-entry method requires a contingent-liability footnote. |
Tick each of these seven boxes and the chapter costs you at most one presentation mark.
Memory Mnemonics for Debentures Quick Recall
The mnemonic strip on the inside fold of the booklet covers the most-confused number pairs.
- 10-15-30: 10% DRR, 15% DIF, by 30th April.
- SP first, P&L next: Loss on Issue routes through Securities Premium first.
- OPC equals CR: Open-market Profit on Cancellation equals Capital Reserve transfer.
Full formula sheet: Issue and Redemption of Debentures Formula Sheet.
Related Resources for Class 12 Accountancy Part 2 Chapter 2
- Class 12 Accountancy Part 2 Chapter 2 Notes (Typeset)
- Class 12 Accountancy Part 2 Chapter 2 NCERT Solutions
- Class 12 Accountancy Part 2 Chapter 2 Formula Sheet
- Class 12 Accountancy Part 2 Chapter 2 NCERT Book PDF
NCERT Handwritten Notes for Class 12 Accountancy: All Chapters
Issue and Redemption of Debentures Class 12 Handwritten Notes FAQs
Ques. What does the Issue and Redemption of Debentures class 12 accountancy handwritten notes PDF contain?
Ans.
Nine ruled pages: debenture issue journal block, the six-cell issue-redemption matrix, Loss on Issue table, interest on debentures and TDS, collateral security, DRR and DIF rules, lump-sum and instalment redemption, open-market purchase and cancellation, and seven red-pen slip warnings. The booklet is sized for last-day revision and assumes you have read the typeset Notes PDF once.
Ques. When is Loss on Issue of Debentures booked?
Ans.
Loss on Issue is booked at the time of issue whenever debentures are issued at a discount, redeemed at a premium, or both. The amount equals discount on issue plus premium on redemption. It is written off first against Securities Premium A/c and then against Statement of P&L if any balance remains.
Ques. What is the DRR percentage required before redemption under the current 2026-27 syllabus?
Ans.
Debenture Redemption Reserve is created at 10% of the nominal value of debentures to be redeemed, out of profits available for dividend, before redemption commences. The earlier 25% requirement no longer applies. Additionally, 15% of the nominal value due for redemption in the next financial year must be invested in specified securities by 30th April of that year as DRI / DIF.
Ques. How is profit on cancellation of own debentures treated?
Ans.
When a firm buys its own debentures from the open market at a price below face value and cancels them, the gap is a capital profit and is transferred to Capital Reserve A/c. It never routes through Statement of P&L. The booklet draws this transfer on page 8 as a single-line ladder.
Ques. Are handwritten notes enough to cover the debentures chapter for CBSE 2026?
Ans.
The handwritten notes are a final-day revision aid, not a first-read resource. Pair them with the Collegedunia typeset Notes PDF and at least 8 solved redemption numericals from the NCERT textbook for a complete 8 to 10 mark coverage of the chapter in the Accountancy Part B paper.
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