TS Grewal Class 12 Accountancy Solutions Vol 2 Chapter 9 – Issue of Debentures 2021-22

TS Grewal Class 12 Accountancy Solutions Vol 2 Chapter 9: Class 12 Chapter 9 is all about Issue of Debentures. In this chapter you will get to know the important topics regarding debentures. Our experts team have created these solutions for your upcoming Class 12 board exams in the detailed manner. You can esaily donwload the free PDF for TS Grewal Class 12 Accountancy Solutions Vol 2 Chapter 9. 

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TS Grewal Class 12 Accountancy Solutions Vol 2 Chapter 9

Detailed Topics – TS Grewal Class 12 Accountancy Solutions Vol 2 Chapter 9  

Debenture:- it is a document issued by a company under its common seal acknowledging the debt and it also contains the terms of repayment of debt and payment of interest at a specified rate.  

Types of Debentures:-  

1. Convertible debentures: these Debentures can be converted into equity shares of issuing company after a predetermined period.  
2. Secured debentures: these instruments are secured by a charge on the fixed assets of the issuer company.  
3. Unsecured debentures: these instruments are unsecured in the sense that if the defaults on payment of the interest or principal amount, the investor is treated like another creditor of the company.  
4. Redeemable Debentures: these are debentures that are redeemed or paid off after the termination of the fixed term. 

Issue of Debentures as Cash  

1. For purchase of assets  
2. For the issue of Debentures  
3. If Debentures are issued at par  
4. If Debentures are issued at a premium  
5. If Debentures are issued at a discount  

Issue of Debentures as collateral security: additional or secondary security in addition to the primary security. Sometimes, when a company takes a loan from a Financial institution besides the primary security, the company may issue debentures for additional security or as collateral security.  

TS Grewal Class 12 Accountancy Solutions Vol 2 Chapter 9 – Sample Questions  

In this section, the students will get TS Grewal Class 12 Accountancy Solutions Vol 2 Chapter 9 sample questions along with the answers.  

Q1. Give the meaning of Debentures.  

A. Debenture is an instrument issued by a company acknowledging a debt. It has the terms of repayment of principal and interest. According to Section 2(30) of the Companies Act 2013, Debenture including debenture stock, bind, or any other instrument of a company evidencing a debt whether constituting a charge on the assets of the company or not.  

Q2. Define Redeemable and irredeemable Debentures.  

A. Debentures issued at par, at a premium, or discounts may be redeemed either at par or at a premium. If the debenture is redeemed at a premium, the premium payable at the time of redemption is provided in the books of account at the time of issue following the prudence Concept of accounting.  

Irredeemable Debentures are also called Perpetual Debentures. These are the Debentures that are not repayable during the lifetime of a company.  

Q3. How is discount or loss on the issue of Debentures written off?  

A. Discount of loss on Issue of Debentures is a capital, which should be written off at the earliest but within the tenure of the debentures, i.e., it should be written off within the period the debentures are to be redeemed. The company thus may write off discount or loss on issue of Debentures at any time before the Debentures are due for redemption. 

Discount is Loss on the issue of Debentures written off us a part of the Finance Cost in the Statement of Profit and Loss. Discount or Loss on Issue of Debentures may be written off following any of the following options:-  

• It may be written off in the first year itself;  
• It may be written off over the tenure (life) of the debentures. 

We have included complete information regarding CBSE TS Grewal Class 12 Accountancy Solutions Vol 2 Chapter 9 – Issue of Debentures. If you have any questions feel free to ask in the comment section. 

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