Corporate Accounting - Issue and Redemption of Debenture

Course Description:

Issue & Redemption of Debenture

Meaning of Debenture

Kinds of Debenture :

1. On the basis of Conversion

(a) Convertible debenture

(b) Non convertible debenture

2. On the basis of redemption

a) Redeemable debenture

b) Irredeemable debenture

3. On the basis of Security

(a) Debenture secured by fixed charge

(b) Debenture secured by floating charge

(c) Unsecured debenture

4. On the basis of Transfer

(a) Registered debenture

(b) Bearer debenture

5. On the basis of Priority

(a) first debenture

(b) Second debenture

6. On the basis of Coupon rate

(a) Specific coupon rate debenture

(b) Zero coupon rate debenture or zero coupon bond debenture

Sequence of payment at the time of winding up

Issue price of debenture

Issue of Debenture for Cash :

A. Issue in total Amount

B. Issue in Instalment

Journal entries in case of issue of debenture in lump – sum

Under Subscription

Over Subscription

Journal entries when issue of debenture in installment

Issue of debenture at par

Calls in Arrear

Calls in Advance

Issued of debenture at security premium

Issue of debenture at discount

Issue For Other than Cash

Issue Of Debenture For Consideration Other Than Cash

(A) Issue of debenture to vendor for asset purchase

(B) Issue of debenture on purchase of Existing Business

{C (i)} Being issue of debenture to Promoters

{C (ii)} Being issue of debentures to Underwriter

Issue of debenture as a Collateral Security/Subsidiary Security/Additional Security

Interest on debenture and income tax there on

Issue of debenture on the conditions of redemption

“Writing Off” Discount/Loss on Issue of Debenture

Redemption of Debenture

Methods of redemption of debenture

Sinking Fund Method or Payment after a fixed period

Many Practical Problems and Illustration with solution for better understanding.