Arrange the following in the correct sequence in the context of debenture.

(A) Payment to debenture-holders
(B) Creation of DRR
(C) Issue of debentures
(D) Redemption becomes due

Choose the correct answer from the options given below:

The correct answer is (C), (B), (D), (A).

Let us understand the step-by-step sequence in the life cycle and redemption of debentures:
1. Issue of debentures (C): This is the first step where a company invites applications from the public or private investors, receives money, and issues debentures as an acknowledgment of debt.
2. Creation of DRR (B): DRR stands for Debenture Redemption Reserve. According to legal and accounting guidelines, a company must set aside a portion of its profits to this reserve account over the tenure of the debentures, specifically before the redemption begins, to ensure adequate funds are available for repayment.
3. Redemption becomes due (D): Once the maturity period of the debentures is reached, the liability to repay the debenture-holders becomes due for payment.
4. Payment to debenture-holders (A): Finally, the actual payment is made to the debenture-holders, discharging the liability of the company and redeeming the debentures.

Therefore, the correct chronological sequence is (C) ⇒ (B) ⇒ (D) ⇒ (A).