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Financial Accounting > Debentures > Flashcards

Debentures Flashcards

1
Q

what are debentures?

A

Fixed term loans @ predetermined interest rate that company receives from debenture holders

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2
Q

Issuer?

A 
Has an obligation. Therefore,
Dr Bank 
Cr Liability
because: Pay interest @ coupon% (obligation)
Pay capital @ maturity date (obligation)
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3
Q

Holder:

A 
Acquires debentures. Therefore,
Dr Fin Asset
Cr Bank
Because: Receives interest @ coupon%
Receives capital @ maturity date
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Financial Accounting (11 decks)

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