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 fund of a company consists [...]
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 premium of 10% and balance [...]
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 as against cash paid for [...]