What is meant by a Debenture?

What is a ‘Convertible Debenture’?

Why would an investor prefer to invest in shares and party in the debentures of a company? 

What is meant by issue of debentures as a collateral security? 

Pass necessary jounal entries for the issue of debentures in the following cases:
(i) Rs.30,000, 12% debentures of Rs.100 each issued at discount of 5%, redeemable at par.
(ii) Rs.40,000, 15% debentures of Rs.100 each issued at par, redeemable at par.

Sargam Ltd. issued Rs.1,00,000, 6% debentures of Rs.10 each at a premium of Rs.2 per debenture on 1st April, 2012. The issue was fully subscribed. Interest will be paid at the end of each financial year. Pass necessary journal entries for the year 2012-13.

State any two methods of redemption of debentures

Is interest payable on debentures issued as collateral security?

ABC Ltd issued Rs.1,00,000, 6%debentures of  Rs.10 each at a premium of  Rs.2 per debenture on 1st April, 2014. The issue was fully subscribed and interest will be paid at the end of each financial year. Pass necessary journal entries for the year 2014-15.

LMN Ltd purchased its own debentures of the face value of Rs 2,00,000 from the open market for immediate cancellation at Rs 92. Pass journal entries.

Pharma Ltd redeemed 500, 10% debentures of Rs 1,000 each by converting them into equity shares of Rs 10 each at a premium of Rs 40 per share. Give necessary journal entries.

Arihant Ltd issued 40,000, 9% debentures of Rs 100 each at a discount of 4% on 1st April, 2014, payable Rs 30 on application and the balance on allotment. The debentures are redeemable after 5 years. Give necessary journal entries and the balance sheet as at 31st March, 2015. Ignore interest. 

S Ltd bought the business of R Ltd on 1st April, 2015 consisting of sundry assets of Rs 11,20,000 and creditors of Rs 2,00,000. Rs 2,00,000 was paid in cash on 3rd April, 2015 and for the balance, 6% debentures were issued at a premium of 20% on 5th April, 2015. Pass necessary journal entries in the books of S Ltd for the above mentioned transactions.