Cheat sheet · Class 12 · CBSE · Commerce Accountancy
Issue and Redemption of Debentures cheat sheet
The whole chapter on one page: key formulas, facts and the points to remember, for quick revision before a test.
CBSE Class 12 · Accountancy
Cheat sheet
Chapter 6Issue and Redemption of Debentures
Debenture = loan; interest is a charge, not an appropriation.
1. Types
- Secured / unsecured; redeemable / irredeemable; convertible / non-convertible; registered / bearer; zero-coupon.
2. Issue Conditions
| Issue | Redemption | Account used |
|---|---|---|
| Par | par | — |
| Discount | par | Discount on Issue A/c |
| Premium | par | Securities Premium A/c |
| Par / discount | premium | Loss on Issue of Debentures A/c |
Loss/discount is written off from Securities Premium, then Statement of P&L.
3. Other Issues
- For purchase of assets (consideration other than cash).
- As collateral security.
4. Key Points
- Interest on debentures paid even in loss.
- Debenture holders are creditors.
- Debenture Redemption Reserve rules apply to some companies.
- Treat interest as a finance cost.
Remember: Types | 4 issue conditions | collateral
Issue and Redemption of Debentures: questions and notes
More Class 12 · CBSE · Commerce Accountancy cheat sheets
- Accounting for Partnership Firms – Fundamentals
- Reconstitution of a Partnership Firm – Admission of a Partner
- Reconstitution of a Partnership Firm – Retirement/Death of a Partner
- Dissolution of Partnership Firm
- Accounting for Share Capital
- Issue and Redemption of Debentures
- Financial Statements of a Company
- Analysis of Financial Statements
- Accounting Ratios
- Cash Flow Statement
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