Which of the following statements is false?

The issue price and redemption value of debentures cannot differ

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Debenture interest is a charge against profits

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

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Debenture is a form of public borrowing

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Solution

The correct option is A
The issue price and redemption value of debentures cannot differ

The issue price and redemption value of debentures can differ.
Eg : Debentures issued at par and redeemed at premium

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Similar questions

Q. Manish Ltd. issued ₹ 40,00,000; 8% Debentures of ₹ 100 each on 1st April, 2017. The terms of issue stated that the debentures are to be redeemed at a premium of 5% on 30th June, 2019. The company decided to transfer ₹ 10,00,000 out of profits to Debentures Redemption Reserve on 31st March, 2018 and ₹ 10,00,000 on 31st March, 2019.
Pass Journal entries regarding the issue and redemption of debentures, DRR and Investment without providing for the interest or loss on issue of debentures.

Q. State to whether the following statements are True/False.

The rate of interest on debentures is attached to the debentures.

Z.Ltd. issued 2,000, 14% 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 profits.

Give journal entries both at the time of issue and redemption of debentures. (Ignore the treatment of loss on issue of debentures and interest.)

Z Ltd issued, 2000, $14 %$ debentures of Rs 100 each on January 01, 2005 at a discount of $10 %$ redeemable at a premium of $10 %$ in equal annual drawings in 4 years our of profits.
Give journal entries at the time of issue and redemption of debentures (Ignore the treatment of loss on issue of debentures and interest.)

Q. Which of the following statement is true?
a. A debenture holder is an owner of the company.
b. A debenture holder can get his money back only on the liquidation of the company.
c. A debenture issued at a discount can be redeemed at a premium.
d. A debenture holder receives interest only in the event of profit.

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Which of the following statements is false?

The correct option is A The issue price and redemption value of debentures cannot differ The issue price and redemption value of debentures can differ. Eg : Debentures issued at par and redeemed at premium

The correct option is A
The issue price and redemption value of debentures cannot differ

The issue price and redemption value of debentures can differ.
Eg : Debentures issued at par and redeemed at premium