Question : Which of the following statements is true?
Option 1: The debenture is a borrowing of the company.
Option 2: Debenture is normally secured by way of charge on the assets of the company.
Option 3: Interest on Debentures is a charge against profit.
Option 4: All of the above
Correct Answer: All of the above
Solution : Answer = All of the above
A debenture is issued by a company to borrow money. A debenture is the acknowledgement of debt given under the seal of the company and containing a contract for the repayment of the principal sum at a specified date and the payment of interest at a fixed rate percent until the principal sum is re-paid.