After redemption of debentures, the balance of Debenture Redemption Reserve Account is transferred to

The correct answer is: A. Capital Reserve Account

A debenture is a long-term debt instrument issued by a company. The company borrows money from investors and promises to repay the loan with interest over a specified period of time. The Debenture Redemption Reserve Account is a fund that companies set up to ensure that they have enough money to repay their debentures when they come due.

When a company redeems its debentures, it transfers the balance of the Debenture Redemption Reserve Account to the Capital Reserve Account. The Capital Reserve Account is a type of reserve that companies can use to make capital expenditures, such as buying new equipment or expanding their business.

The other options are incorrect because:

• General Reserve Account is a type of reserve that companies can use to meet unexpected expenses or to make distributions to shareholders.
• Sinking Fund Account is a fund that companies set up to accumulate money to repay their debentures.
• Profit and Loss Account is a statement of a company’s income and expenses for a specific period of time.