DEBENTURE

ACCOUNTING
 Features of Debentures:
It acknowledges the debt of a company.
A predetermined fixed rate of interest is given on
debentures.
The interest on debentures is payable whether the
company has earned profit or not.
Debenture holders are the creditors of the company
with out any voting right.
It can be converted into shares.
At the time of liquidation debenture holders are
paid off before the share holders.
 TYPES OF DEBENTURES

On the basis On the basis On the basis

On the basis of On the basis
of Security of of
Permanence of Priority
Convertibility Negotiability
On the Basis of Security :
• Secured Debentures
• Unsecured Debentures
On the basis of Convertibility:
• Convertible Debentures
• Nonconvertible Debentures
On the basis of Permanence
• Redeemable Debentures
• Irredeemable Debentures
On the basis of Negotiability
• Registered Debentures
• Bearer Debentures
On the basis of priority
• First Debenture
• Second Debentures
 ISSUE OF DEBENTURES: A company may issue
debentures for different purposes i.e. issued for cash,
for buying assets or for providing security. It can be
issued as follows:
A.Issued for cash and payable in full on application
( price of redemption not given)
B. Issued for cash and payable in full on application
( price of redemption given)
C. Issued for cash and payable in installments.
( price of redemption not given)
D. . Issued for cash and payable in installments.
( price of redemption given)
D. Issued as Collateral Security
E. Issued