What traumatic event does Zitkala-Sa describe at the school?

The forcible cutting of her long hair

Why was the cutting of her hair so humiliating to Zitkala-Sa?

Among her people, shingled hair was worn by cowards and mourners

It is a written instrument under the common seal of a company acknowledging a debt and containing terms for repayment of principal and payment of interest.

From which word is the term debenture derived?

From the Latin word debere, which means to borrow.

How does a debenture differ from a share?

A debenture holder is a creditor while a shareholder is an owner; debenture interest is a charge against profit, whereas dividend on shares is an appropriation.

Name some types of debentures.

Secured or unsecured, convertible or non-convertible, redeemable or irredeemable, registered or bearer, and first or second mortgage debentures.

What does the Companies Act 2013 include under "debenture"?

Under Section 2(30) it includes debenture stock, bonds and any other securities of a company, whether or not they create a charge on its assets.

What is meant by issue of debentures as collateral security?

Issuing debentures as additional security for a loan, to be cancelled or returned when the loan is repaid.

How is interest on debentures treated?

It is a charge against profits, paid at a fixed rate, and subject to deduction of tax at source as required.

When does loss on issue of debentures arise?

When debentures are issued at a discount or are redeemable at a premium, the discount or premium payable is treated as a loss on issue.

What are the methods of redemption of debentures?

Redemption in a lump sum on maturity, by instalments (drawing by lots), or by purchase in the open market.

Can debentures be issued for consideration other than cash?

Yes, debentures may be issued to vendors in payment for assets purchased instead of paying cash.

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Chapter 2: Issue and Redemption of Debentures — Class 12 Accountancy

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Chapter 2: Issue and Redemption of Debentures

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A debenture is:

Summary

A debenture is a written instrument acknowledging a debt under the common seal of the company, containing a contract to repay the principal after a specified period and to pay interest at a fixed rate. The word comes from the Latin debere, meaning to borrow, and finance raised through debentures is long-term debt. Section 2(30) of the Companies Act 2013 says the term includes debenture stock, bonds and other securities, whether or not they create a charge on the company's assets. Debentures differ from shares: a debenture holder is a creditor, not an owner; interest is a charge against profit; and debentures are usually secured and redeemable. They may be classified on the basis of security, convertibility, permanence, negotiability and priority. Debentures can be issued at par, at a premium or at a discount, and for cash or for consideration other than cash; they may also be issued as collateral security for loans. The terms of redemption may differ from the terms of issue, giving rise to loss on issue of debentures. The chapter explains the accounting for the issue of debentures under various terms, the writing-off of discount or loss on issue, interest on debentures, and their redemption in a lump sum or by instalments out of the proceeds available.

Meaning and types of debenturesIssue at par, premium and discountDebentures for cash, other consideration and as collateralInterest and loss on issue of debenturesMethods of redemption of debentures

Key terms

Debenture

A written instrument under the company's common seal acknowledging a debt and promising repayment of principal and payment of interest at a fixed rate.

Secured Debentures

Debentures that create a charge on the assets of the company as security for repayment.

Convertible Debentures

Debentures that can be converted into shares of the company after a specified period as per the terms of issue.

Debentures as Collateral Security

Debentures issued as additional security for a loan, to be returned when the loan is repaid.

Loss on Issue of Debentures

The loss arising when debentures are issued at a discount or are redeemable at a premium, written off over time.

Redemption of Debentures

The repayment of the amount due on debentures, in a lump sum or by instalments, on or before maturity.

Important questions

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A written instrument under the company's common seal acknowledging a debt and promising repayment of principal and payment of interest at a fixed rate.

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Practice quiz · Issue and Redemption of Debentures

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Issue and Redemption of Debentures

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