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प्रश्न
State the meaning of ‘Debentures issued as Collateral Security’.
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उत्तर
The term collateral security means additional or secondary security in addition to the primary security. Sometimes, when a company takes a loan from a financial institution, besides the primary security, the company may issue debentures for additional security (as collateral security). The lender who receives debentures as collateral security is not entitled to interest on these debentures. If any default is made by the company in paying back the principal amount (i.e. the loan amount) or interest on the loan, then the lender has the full right to recover his/her dues from the sale of primary security. But if the primary security is not sufficient to recover the amount of the debt, then the debentures issued as collateral may be used for recovery of the remaining amount.
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संबंधित प्रश्न
What is the discount on the issue of debentures?
Long Answer Question
Explain the different terms for the issue of debentures with reference to their redemption.
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(ii) A debenture issued at Rs. 95, repayable at Rs. 105; and
(iii) A debenture issued at Rs. 100, repayable at Rs. 105;
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Pass the journal entry.
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Discount on issue of debentures is shown under the following head in the Balance Sheet?
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The word 'debenture' has been derived from which Latin word (which means to borrow)?
Premium on redemption is shown under which head until debentures are redeemed?
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Which of the following. column indicated in·the statement given below is to be credited?
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Debenture is ______.
