Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

How can the payment for debentures be structured?

Options:

Entire amount to be paid on allotment

Entire amount to be paid on maturity

In installments on application, on allotment, and on various calls

Payment is optional and decided by investors

Correct Answer:

In installments on application, on allotment, and on various calls

Explanation:

Debenture issuers have flexibility in structuring the payment for debentures. The payment structure can vary, but a common method is to require investors to make payments in installments. Investors are required to make payments in installments at different stages of the debenture issuance process. It allows for more flexibility for both the issuer and investors, as payments are spread out over time