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When debentures are issued at premium, the amount of premium is credited to Debenture Premium Account. Debenture Premium Account is a capital profit and is transferred to Capital Reserve Account. When debentures are issued at discount, the amount of discount is debited to 'Discount on Issue of Debentures Account.

A debenture is a bond issued with no collateral. Instead, investors rely upon the general creditworthiness and reputation of the issuing entity to obtain a return of their investment plus interest income.Examples of debentures are Treasury bonds and Treasury bills.

Put simply, a debenture is the document that grants lenders a charge over a borrower's assets, giving them a means of collecting debt if the borrower defaults. Debentures are commonly used by traditional lenders, such as banks, when providing high-value funding to larger companies.

The major types of debentures are:Registered Debentures: Registered debentures are registered with the company.Bearer Debentures:Secured Debentures:Unsecured Debentures:Redeemable Debentures:Non-redeemable Debentures:Convertible Debentures:Non-convertible Debentures:More items...?Aug 6, 2018

Meaning of debenture holder in Englisha person or company that has lent money to another person or company by using a debenture: Payment of interest is made to the debenture holder at a specified rate and at clearly defined intervals.

(1) Debenture is a loan taken by company for medium to long period. Debenture holder therefore is the creditor of the company. (2) Debenture capital is returnable and therefore has no permanency.Hence Debenture holders are not the owners of the company.

Corporations and governments can issue debentures. Governments typically issue long-term bondsthose with maturities of longer than 10 years. Considered low-risk investments, these government bonds have the backing of the government issuer. Corporations also use debentures as long-term loans.