In accountancy, the process of issuing and redeeming debentures follows a specific order:
- Debenture Issuance (C): This marks the commencement of the debenture lifecycle, wherein a company generates capital by offering debentures, which are essentially loan instruments, to potential investors.
- Establishment of Debenture Redemption Reserve (DRR) (B): Subsequent to the debenture issuance, a company must allocate funds into a DRR. This reserve is mandated to guarantee the availability of resources for future debenture repayment, thereby protecting investor interests.
- Maturity Approaching (D): As the debentures near their expiration date, the company initiates preparations for repaying the principal amount to debenture holders. This phase involves verifying that adequate funds are accessible from the DRR.
- Debenture Holder Repayment (A): The final stage involves the company remitting the full repayment amount to the debenture holders, thereby extinguishing the debt.
Therefore, the accurate procedural sequence is (C), (B), (D), (A).