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Issue and Redemption of Debentures — Syllabus

Madhya Pradesh Board · Class 12 · Accountancy

What Issue and Redemption of Debentures covers in Madhya Pradesh Board Class 12 Accountancy: 4 topics, for the 2026-27 session.

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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4 Topics · Madhya Pradesh Board Class 12 Accountancy · 2026-27

Topics in Issue and Redemption of Debentures

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.

Key Concepts

Central concept: Debentures are borrowed capital raised by a company and redeemed according to terms of issue, security, tenure, convertibility, interest, and repayment method.

Meaning of debentureBondDebenture vs shareTypes of debenturesIssue of debenturesOver subscriptionDebentures for consideration other than cashCollateral security

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Frequently Asked Questions

What are the important topics in Issue and Redemption of Debentures for Madhya Pradesh Board Class 12 Accountancy?
Key topics in Issue and Redemption of Debentures include Meaning and Nature of Debentures, Distinction Between Shares and Debentures, Types of Debentures, Issue of Debentures. Study these first, then practise questions on each for the Madhya Pradesh Board Class 12 board exam.
How should I revise Issue and Redemption of Debentures for the Madhya Pradesh Board Class 12 board exam?
Learn the core ideas first, then work through the 98 practice questions on Issue and Redemption 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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