Tag Archives | Debentures

Debentures: Features and Classes | India | Accounting

In this article we will discuss about:- 1. Meaning of a Debenture 2. Features of a Debenture 3. Classes 4. Debenture and Debenture Stock. Meaning of a Debenture: Generally, companies, for their expansion and further development, may require funds. Funds flow in from the internal and external sources i.e. the owners’ and outsiders’ contribution. Internal […]

Debenture Trustees (Accounting Treatment) | India | Company

In this article we will discuss about the accounting entries relating to debenture trustees, explained with the help of an illustration. Generally, to look after the interest of the debenture-holders, certain persons are elected as trustees by the debenture-holders. Alternatively, the names of trustees may be mentioned in the prospectus inviting subscription for debentures of […]

Accounting Entries for Issue of Debentures | Capital | Accounting

In this article we will discuss about the accounting entries for issue of debentures. (A) Issue of Debenture for Cash: The issue procedure with regard to debentures is the same as that of shares. The amount due on debentures may be paid in installments, such as, Application, Allotment and Calls. When debentures are issued at […]

Accounting Entries for Redemption of Debentures | Accounting

In this article we will discuss about the accounting entries for redemption of debentures. 1. Redemption Out of Profits: When debentures are redeemed out of profit, it is essential that an equal amount to the face value of the debentures redeemed will be transferred to Debenture Redemption Reserve Account. When all the debentures are redeemed, […]

Debentures: Problems and Solutions | Capital | Accounting

Here is a compilation of top six accounting problems on debentures with its relevant solutions. Illustration 1:  AB Ltd. purchased assets worth Rs. 6, 80,000 and took over liabilities of Rs. 80,000. It was agreed to pay the purchase price of Rs. 6,40,000 by issuing debentures valued Rs. 4,40,000 of Rs. 100 each at a […]

Purchase of Own Debentures: Journal Entries | Capital | Accounting

The purchase of own debentures in the market may be for different reasons: 1. Where Debentures are Purchased for Cancellation 2. When Debentures are Purchased for Investment. 1. Where Debentures are Purchased for Cancellation: When Company’s own debentures are purchased by the Company, “Own Debenture Account” (or Investment in Own Debenture Account) will be debited […]

Redemption of Debentures | Company | Accounting

To provide necessary funds for the discharge of debentures, the company may adopt any of the following courses:- 1. By Creation of Debenture Redemption Fund or Sinking Fund 2. Insurance Policy Method. 1. By Creation of Debenture Redemption Fund or Sinking Fund: The ideal method is to set aside every year a certain sum of […]

Redemption of Debentures (With Illustrations)

In this article we will discuss about the Redemption of Debentures:- 1. Introduction to Redemption of Debentures 2. Ex-interest Price and Cum-interest Price 3. Convertible Debentures 4. Sinking Fund. Introduction to Redemption of Debentures: Debentures are invariably redeemable. The Companies Act has not laid down any conditions for the redemption of debentures. Of course, the […]

Issue of Debentures: Meaning, Expenses and Writing Off Discount

In this article we will discuss about the Issue of Debentures:- 1. Meaning of Issue of Debentures 2. Expenses on Issue of Debentures Account 3. Debenture Redemption Reserve 4. Collateral Security 5. Writing Off Discount. Contents: Meaning of Issue of Debentures Expenses on Issue of Debentures Account Debenture Redemption Reserve Issue of Debentures as a […]

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