Issue and Redemption of Debentures Class 12 Notes: The Central Board of Secondary Education (CBSE) is all set to conduct its CBSE Class 12 Board Exam in 2024. Since we are now only two months away from 2024, the preparation for the examination should start with great enthusiasm and dedication. The most primary element required for the preparation of any examination is the collection of the study materials. Well, it is true that your result is completely based on the preparation that you do for the exam. Thus, to strengthen your preparation, we have brought to you all the required study materials for the upcoming CBSE Board Exam 2024.
Here, students can find CBSE Issue and Redemption of Shares class 12 short notes from Accountancy Part 2 Chapter 2. These Issue and Redemption of Shares class 12 revision notes will help you understand the chapter and solve any question related to it. Also, find links to other useful important resources to brace up your preparation for the examination.
Related:
CBSE Class 12 Accountancy Syllabus 2023-2024
CBSE Class 12 Accountancy MCQs
NCERT Solutions for Class 12 Accountancy
CBSE Class 12 Accountancy Chapter 2 Mind Maps
CBSE Class 12 Accountancy Chapter 1 Revision Notes
CBSE Class 12 Accountancy Chapter 2 Revision Notes
Revision Notes for CBSE Class 12 Accountancy Chapter 2 Issue and Redemption of Shares
What are Debentures?
Debenture is a written instrument acknowledging a debt under the common seal of the company. It is derived from a Latin word called ‘Debere ’, which means to borrow.
Difference between Shares and Debentures
The differences between shares and debentures are as follows:
|
Shares |
Debentures |
|
Share is a representation of ownership in a company. It is a part of owned capital. |
Debentures are an acknowledgment of debts. It is a part of borrowed capital. |
|
The return on shares is called a dividend |
The return on debentures is called interest |
|
They are not returned during the life cycle of the company |
They are repaid on expiry of the time period since they come with a deadline |
|
Shareholders enjoy voting rights |
Debenture holders do not enjoy voting rights |
|
They cannot be converted into debentures |
They can be converted into shares |
Types of Debentures
- From the point of view of Security
- a.Secured Debentures- Those debentures where a charge is created on the assets of the company for the purpose of payment in case of default are called secured debentures.
- Unsecured Debentures- They do not have a specific charge on the assets of the company
- From the point of view of Tenure
- Reedemable Debentures- Those debentures which are payable on the expiry of the specific period either in a lump sum or in installments during the lifetime of the company.
- Irreedemable Debentures- These debentures are repayable on the winding-up of a company or on the expiry of a long period
- From the point of view of Convertibility
- Convertible Debentures- Debentures that are convertible into equity shares or in any other security either at the option of the company or the debenture holders are called convertible debentures.
- Non–Convertible Debentures- The debentures that cannot be converted into shares or in any other securities are called non-convertible debentures.
- From Coupon Rate Point of View
- SpecificCoupon Rate Debentures– These debentures are issued with a specified rate of interest, which is called the coupon rate
- Zero CouponRate Debentures– These debentures do not carry a specific rate of interest. In order to compensate the investors, such debentures are issued at substantial discounts and the difference between the nominal value and the issue price is treated as the amount of interest related to the duration of the
- From the point of view of Registration
- Registered Debentures- Those debentures in respect of which all details including names, addresses, and particulars of holding of the debenture holders are entered in a register kept by the company.
- Bearer Debentures– The debentures that can be transferred by way of delivery and the company does not keep any record of the debentures are called bearer debentures.
To download the complete Revision Notes for CBSE Class 12 Issue and Redemption of Debentures, click on the link below
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