Question

32. Which of the below-mentioned statement is not true?
(A) The issue price and redemption value of debentures cannot differ
(B) Interest on debenture is a charge against profits
(C) It is common to prefix debentures with the agreed interest rate
(D) A debenture is a kind of public borrowing​

Answer 1

Answer:

The issue price and redemption value of debentures cannot differ

Explanation:

Debentures' issue value and redemption value may vary. Debentures may be issued at par and redeemed at premium. It is not required that the issue price and redemption price be the same.

The corporation declares by issuing debentures that it will publish a certificate carrying its stamp as an acknowledgment of the debt it has incurred. Debentures are issued by a company in a similar manner to how shares are. A prospectus is published, letters of allocation are distributed, and applications are invited.

Debentures that are secured by a charge against the company's assets or property are known as secured debentures.

Debentures that are not backed by the assets of the corporation are said to as unsecure.

#SPJ3