Terms of Issue of Debentures Class 12

Terms of Issue of Debentures – At the time of issue of debentures, the terms on which they are issued and will be redeemed are specified.

These terms of issue of debentures and other conditions could result in six different kinds of situations. These are –




  1. Issue at par and redemption at par
  2. Issue at discount and redemption at par
  3. Issue at premium and redemption at par
  4. Issue at par and redemption at premium
  5. Issue at discount and redemption at premium
  6. Issue at premium and redemption at premium

Journal Entries to be passed in each of the above mentioned cases –

1. Issue at par and redemption at par

Issue at par and redemption at par

2. Issue at discount and redemption at par

Issue at discount and redemption at par

3. Issue at premium and redemption at par




Issue at premium and redemption at par

4. Issue at par and redemption at premium

Issue at par and redemption at premium

5. Issue at discount and redemption at premium

Issue at discount and redemption at premium

6. Issue at premium and redemption at premium




Therefore, issuance and redemption of debentures can fall into any of the above six categories and journal entries are passed keeping in mind the terms of issue of debentures and the conditions so agreed.

Chapter  2 –  Issue and Redemption of Debentures

  1. Meaning of Debentures
  2. Issue of Debentures
  3. Over Subscription of Debentures
  4. Terms of Issue of Debentures
  5. Interest on Debentures
  6. Writing off Discount/Loss on Issue of Debentures
  7. Redemption of Debentures