Tag: company accounts part - 2 (accounting for debentures)

A company can issue convertible debentures.

Debentures cannot be secured.

A company can issue redeemable debentures.

Debentures have no right to participate in profits over and above their fixed interest.

The carrying amount of debentures gets reduced each year at a rate of 20%.

Issue price and the carrying amount of debentures are equal.

At the time of redemption, the debenture holder will be paid the issue price.

The face value and the carrying amount of debentures are equal.

A debenture holder is an owner of the company.

A debenture holder can get his money back only on the liquidation of the company.

A debenture issued at a discount can be redeemed at a premium.

A debenture holder receives interest only in the event of profits.

Debit asset A/c; Credit vendor A/c

Debit asset A/c; Credit bank A/c

Debit asset A/c; Credit debenture A/c

Debit debenture A/c; Credit asset A/c

revenue loss to be charged in the year of issue

capital loss to be written off from capital reserve

capital loss to be written off over the tenure of the debenture

capital loss to be shown as goodwill

Debentures can be issued for cash or consideration other than cash or as collateral security

Debentures can not be forfeited for non-payment of call money.

A company can buy its own debentures.

A debentures issued at a discount can be redeemed at a premium.

A company can issue redeemable debentures

A company can issue debentures with voting rights

A company can buy its own shares

A company can buy its own debentures

A company can issue bearer debentures.

A company can issue convertible debentures.

A company can issue redeemable debentures.

A company can issue debentures with voting rights.

2%

2.5%

3%

5%

10%

7%

6%

5%