Issue of Debentures at Par

Debentures are said to be issued at par when the debenture-holder is required to pay an amount equal to the nominal or face value of the debentures e.g. the issue of Rs.1,000 debenture for Rs.1,000.

 

 

Note:
–All cash transactions are generally passed through the Cash Book.

– It is customary to prefix the rate of interest payable on debentures with the debenture account.

–The company cannot allot more debentures than issued. The excess application money may be retained by the company against the allotment money due. But the excess application money received on debentures rejected has to be refunded to the applicants.