Cost Of Capital For Bonds And Debentures Is Calculated On______
Cost of Capital for Bonds and, Debentures is calculated after-tax basis.
What entries for the redemption of debentures will be done when : (a) debentures are redeemed by annual drawings out of profits; (b) debentures are redeemed by drawing a lot out of capital; and (c) debentures are redeemed by purchasing them in the open market when sinking fund for the redemption of debentures is not maintained − (i) when out of profit, and (ii) when out of capital?
X.Ltd. issued 5,000, 15% debentures of Rs.100 each on April 01, 2013 at a discount of 10%, redeemable at a premium of 10% in equal annual drawings in 4 years out of capital.
Give journal entries both at the time of issue and redemption of debentures. (Ignore the treatment of loss on issue of debentures and interest.)
Distinguish between a debenture and a share. Why debenture is known as loan-capital? Explain.
Distinguish between a debenture and a share. Why is debenture known as loan capital? Explain.