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Question
A Debenture issued by a company by creating a fixed or a floating charge on the company's assets is known as ______.
Options
Non-Convertible Debenture
Mortgage Debenture
Redeemable Debenture
Unsecured Debenture
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Solution
A Debenture issued by a company by creating a fixed or a floating charge on the company's assets is known as Mortgage Debenture.
Explanation:
A mortgage debenture is secured by the issuing company's real estate or other physical assets. These assets act as collateral for debenture holders in case the company fails to make payments. If the corporation fails to meet its commitments, debenture holders can assert their claim on the mortgaged assets to recoup their investment.
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Tata Ltd. issued 5,000, 10% Debentures of Rs 100 each on 1st April 2012. The issue was fully subscribed. According to the terms of issue, interest on debentures is payable half-yearly on 30th September and 31st March and tax deducted at source is 10%.
Pass the necessary journal entries related to the debenture interest for the half-yearly ending on 31st March 2013 and transfer of interest on debentures to Statement of Profit and Loss.
Answer in a sentence only.
What is a ‘Convertible Debenture’?
Write one word/term/phrase which can substitute the following
The debentures of which payment is made on the expiry of specific period.
Select most appropriate alternative from those given below
__________ is acknowledgment of debt under common seal of company.
Select most appropriate alternative from those given below :
The debentures which are converted into shares is called____________.
State to whether the following statement is True/False.
The acknowledgement of debt under common seal of company in termed as share.
State to whether the following statement is True/False.
The debentures are known as creditors ship capital of the company.
State to whether the following statement is True/False.
The unregistered debentures are known as naked debentures.
State to whether the following statement is True/False.
Unsecured debentures are safer than secured debentures.
Answer the following question in one sentence.
What are ‘convertible debentures’?
