RANA Commerce

  ACCOUNTING FOR DEBENTURE Meaning of Debenture          You have learnt that Share Capital is the main source of finance of a Joint Stock Company. Such Capital is raised by issuing Shares. Those who hold the Shares of the Company are called the Shareholders and are owners of the Company. Company may need additional amount of money for a long period. It cannot issue shares every time. It can raise loan from the public. The amount of loan can be divided into units of small denominations and the Company can sell them to the public. Each unit is called a ‘Debenture’ and holder of such units is called Debenture holder. The amount so raised is loan for the Company. In this lesson we shall learn about issue of Debentures and its accounting treatment.       According to Section 2(30) of Companies Act 2013, Debenture includes Debenture stock, bonds or any other instrument of a Company evidencing a debt, whether cons...