XYG Company Ltd. purchased assets with a book value of Rs. 99,000 from another firm. It was agreed that purchase consideration should be paid by issuing 11% debentures of Rs. 100 each at a premium of 10%. Calculate the number of debentures to be issued.

Which of the following statements about debentures is FALSE?

(A) Debenture is a part of owned capital.

(B) Debentures cannot be converted into shares.

(C) Redeemable debentures are those debentures, which are payable on the expiry of the specific period.

(D) Debentures cannot be issued at a premium.

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The following journal entry appears in the books of XYZ Co. Ltd.

Calculate the rate at which debentures have been issued at a discount.

Match List I with List II

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Which of the following debentures do not have a specific charge on the assets of the company.

Which of the following is true about debentures-

(A) Debenture is a part of owned capital.

(B) The payment of interest on debentures is a charge on the profits of the company.

(C) The debentures cannot be issued at a discount of more than 10% of the face value.

(D) Redeemable debentures are those debentures which are payable on the expiry of the specific period.

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The following are the features of Debenture:

(A) Debentures can be converted into shares if the terms of issue are so provided, and in that case these are known as convertible debentures.

(B) Debentures are generally secured and carry a fixed or floating charge over the assets of the company.

(C) The rate of interest on debentures may vary from year to year depending upon the profits of the company.

(D) The debentures are issued for a specified period and repayable on the expiry of that period.

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