Interest on Debentures

Q.

Which of the following statements is false?

1. The issue price and redemption value of debentures cannot differ

2. Debenture is a form of public borrowing

3. Debenture interest is a charge against profits

4. It is customary to prefix debentures with the agreed rate of interest

Q.

On 1st April 2017, Sunrise Ltd issued 5000, 8% Debentures of Rs. 100 each at a discount of 5%. What will be the total amount of interest for the year ending 31st March 2018?

1. 25, 000

2. 38, 000

3. 42, 000

4. 40, 000

Q.

Interest on Debentures is a/an ___ and is debited to the Profit & Loss A/c.

1. None of these

2. Income

3. Expense

4. Revenue

Q.

Interest is payable even if there are no profits.

1. False

2. True

Q.

Return paid on debentures is ___

1. Tax

2. Commission

3. Dividend

4. Interest

Q.

Interest on debentures is calculated on ___

1. None of these

2. Face value of debentures

3. Market value of debentures

4. Purchase value of debentures

Q. Interest is payable even if there are no profits.

1. True
2. False

Q. Interest on debentures is calculated on the market value of debentures.

1. True
2. False

Q.

Interest is payable on debentures at which rate ?

1. None of these

2. Any rate according to company`s choice

3. Fixed predetermined rate

4. On the basis of profits

Q. Return paid on debentures is interest.

1. False
2. True