This category explains the meaning and types of Debentures and the relevant journal entries in different situations.
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Debentures – Meaning and Types
Debenture is a written instrument acknowledging a debt under the common seal of the company. It contains a contract for repayment of principal after a specified period or at intervals and for payment of interest at a fixed rate payable either half-yearly or yearly.
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02, 2016
Types of Debentures – Chart
Debentures can be classified on the basis of rate of interest, redemption, conversion, mode of transfer.....etc.
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02, 2016
Issue of Debentures
Debentures can be issued to vendor for purchase of assets, to the promoters for the payment of cost of promotion or for the purchase of business.
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02, 2016
Debentures Issued as Collateral Security
It means the issue of Debentures by a company as an additional security for borrowing a loan from bank or any other financial institution so that these debentures can meet the purpose of security .
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02, 2016
Terms of Issue of Debentures
Debentures can be issued at par,discount or at premium, similarly these can be redeemed at par,at discount or at premium, thus making possible these six cases.