What are Debentures? Video Lecture | Accountancy CUET Preparation - Commerce

what our debentures debentures are like
we said loans from the public basically
a debenture is a certificate which
represents the loan will be company
debentures are usually secured it could
be a specific charge or a floating
charge suppose debentures are issued
against the security of a bending it
would mean that in the event of
liquidation when the building is sold
the assets which are the the proceeds
which are realized from the sale of the
building will go first to the dimension
holders to repay the debentures this is
a specific charge since there is a
specific asset which is held as security
against the debentures issued but
usually the ventures are secured by a
general charge on all the assets of the
company so if tomorrow the company were
to be wound up then the assets what is
realized from sale of assets would be
first paid to the dimension holders
before paying other outside liabilities
interest on Dementors is paid at a fixed
rate on specific dates usually they are
paid half yearly maybe 30 on June 31st
December or they are paid quarterly or
they may be paid once a year annually
but there is a specific date dates of
payment of interest interest is the
return on debentures interest is the
return on any loan and debentures is
unknown so interest is actually a charge
against profits it is not a distribution
of profit whether a company makes a
profit or loss interest is an expense
just like any other expense whether it
be rent salary advertising whatever so
interest is a charge against profits if
the company is making losses the
interest will increase its losses
a debenture may be listed on a stock
exchange
if the debenture is listed on a psychic
on on a stock exchange it can be
transferred easily it can be traded and
transfer easily debentures again just
like shares may be issued at par may be
issued at a premium or may be issued at
a discount when debentures are redeemed
they are usually redeemed or repaid in
cash sometimes if the debentures are
convertible debentures then they are
converted into shares or they may even
be converted into other debentures so
the debenture is nothing but a
certificate which represents a loan
taken by a company the ventures are
normally secured they pay the return on
debentures is interest fixed rates which
are paid on fixed dates every year the
interest which is payable on debentures
is a charge against profits so that
whether the company makes profits or
losses interest is charged interest must
be paid the ventures may be listed on a
stock exchange which would make them
transferable makes them easily
negotiable you can buy and sell trade in
the ventures the ventures may be issued
at par Premium or discount just like in
the case of chase when the ventures are
redeemed they are repaid the venture is
a loan which is normally has to be
repaid after a period of time it may be
repaid in cash it may be converted to
shapes or may be fresh dimensions or
converted to nude images