Debentures 1

Debentures are a part of

• Shareholders' fund

• Borrowed funds

• Borrowings from Bank

• None of these

Debentures are shown in the balance sheet of a company under the head of

• Non current liabilities

• Current liabilities

• Share Capital

• None of these

Debenture holders are

• Owners of the company

• Lenders of the company

• Vendors of the company

• Customers of the company

Debenture interest is paid

• At a predetermined rate

• At variable rate

• At a rate based on net profit of the company

• At a rate as determined by the company from time to time

At the time issue of debentures, debentures account is

• Credited by the amount received

• Credited by the issue price of the debentures

• Credited by the nominal (face) value of the debentures

• None of the above

When debentures are issued at a discount, the discount is written off

• After debentures have been redeemed

• In the year when debentures are issued

• During the life of the debentures

• None of these

Interest on debentures is paid on

• Amount received on issue

• Nominal (face) value

• On premium

• None of these

Debentures issued as collateral security

• Are recorded in the books

• Are not recorded in the books

• May or may not be recorded in the books

• None of these

X ltd. purchased building of Y ltd. for Rs. 4,00,000. The consideration was paid by issue of 10% debentures of Rs. 100 each at a discount of Rs. 20. 10% debentures account is credited with

• Rs. 5,20,000

• Rs. 5,00,000

• Rs. 4,80,000

• Rs. 3,20,000

Discount or loss on issue of debentures is written off from

• Securities premium reserve

• Securities premium reserve (if it exists) and thereafter from statement of profit and loss

• Statement of profit and loss

• General reserve