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Joint Stock Accounts : Issue of Debentures — Revision Notes

ICSE · Class 12 · Accountancy

Joint Stock Accounts : Issue of Debentures revision notes for ICSE Class 12 Accountancy: 4 topics in quick points.

45 questions37 flashcards5 formulas & key relations5 concepts

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An illustration showing a company issuing a debenture certificate to an investor, highlighting it as an acknowledgement of debt, with key terms like 'interest rate', 'repayment period', and 'company s
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Key Topics to Revise

1

Meaning, Nature, and Basic Features

  • A debenture is an instrument issued by a company under its common seal, acknowledging debt and promising repayment of principal with interest.
  • Debentures are loan capital and not part of ownership capital.
  • Debentureholders are creditors of the company, not owners.
2

Types and Classification of Debentures

  • From transfer point of view: registered debentures and bearer debentures.
  • From security point of view: secured or mortgaged debentures and unsecured or simple or naked debentures.
  • From redemption point of view: redeemable debentures and irredeemable debentures.
3

Issue of Debentures: Price and Redemption Terms

  • Debentures may be issued at par, at premium, or at discount.
  • Debentures may be redeemable at par or at premium.
  • Debentures cannot be redeemed at discount under the company’s own redemption terms.
4

Journal Entries for Issue of Debentures for Cash

  • The accounting procedure for issue of debentures is similar to issue of shares, with Debenture Account replacing Share Capital Account.
  • Representative personal accounts used are Debenture Application Account, Debenture Allotment Account, and Debenture Call Account.
  • If excess application money exists and the question is silent, it is refunded and not carried forward to Calls-in-Advance Account.

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Full Notes

Key Concepts

A debenture is an instrument issuedA debentureholder is the personDebentures may be classified fromConvertible debentures can be converted intoDebentures may be issued at par

Frequently Asked Questions

What are the important topics in Joint Stock Accounts : Issue of Debentures for ICSE Class 12 Accountancy?
Key topics in Joint Stock Accounts : Issue of Debentures include Meaning, Nature, and Basic Features, Types and Classification of Debentures, Issue of Debentures: Price and Redemption Terms, Journal Entries for Issue of Debentures for Cash. Study these first, then practise questions on each for the ICSE Class 12 board exam.
How should I revise Joint Stock Accounts : Issue of Debentures for the ICSE Class 12 board exam?
Learn the core ideas first, then work through the 45 practice questions on Joint Stock Accounts : Issue of Debentures. Revise definitions regularly and use flashcards for quick recall before the exam.

Sources & Official References

Content is aligned to the official syllabus. Refer to the board website for the latest curriculum.

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All ICSE Class 12 Accountancy Revision Notes

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