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Revision Notes

Issue and Redemption of Debentures

Madhya Pradesh Board · Class 12 · Accountancy

Quick revision notes for Issue and Redemption of Debentures — Madhya Pradesh Board Class 12 Accountancy. Key concepts, formulas, and definitions for last-minute revision.

98 questions84 flashcards5 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 and Nature of Debentures

  • A debenture is a written instrument acknowledging a debt under the common seal of the company.
  • Debentures represent borrowed capital, not owned capital.
  • Debentures may be issued through private placement or by public offer.
2

Distinction Between Shares and Debentures

  • A share represents ownership, while a debenture represents debt.
  • Return on shares is dividend; return on debentures is interest.
  • Dividend is an appropriation of profits, but interest is a charge on profits.
3

Types of Debentures

  • From security point of view: secured debentures and unsecured debentures.
  • Secured debentures have a charge on assets for payment in case of default.
  • A fixed charge is created on a specific asset held for use in operations and not meant for sale.
4

Issue of Debentures

  • Debentures can be issued at par, at discount, or at premium.
  • They can also be issued for consideration other than cash or as collateral security.
  • Over subscription is possible, but a company cannot allot more debentures than invited for subscription.

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Full Notes

Key Concepts

A debenture is a written instrumentA bond is also an instrumentA share represents ownership ofDebentures are classified as securedDebentures are issued at par when

Frequently Asked Questions

What are the important topics in Issue and Redemption of Debentures for Madhya Pradesh Board Class 12 Accountancy?
Issue and Redemption of Debentures covers several key topics that are frequently asked in Madhya Pradesh Board Class 12 board exams. Focus on the core concepts listed on this page and practise related questions to build confidence.
How to score full marks in Issue and Redemption of Debentures — Madhya Pradesh Board Class 12 Accountancy?
Understand the core concepts first, then work through the 98 practice questions available for this chapter. Revise formulas and 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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