Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Issue and Redemption of Debentures NCERT Solutions | What is meant by ‘Mortgaged Debent

Welcome to the NCERT Solutions for Class 12th Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Issue and Redemption of Debentures. This page offers a step-by-step solution to the specific question from Excercise ".$ex_no." , Question 9: what is meant by lsquo mortgaged debentures rsquo....
Question 9

What is meant by ‘Mortgaged Debentures’?

Answer

Mortgaged Debentures are those debentures that are secured against assets of a company.These are also known as secured debentures. If the debentures are secured against a particular asset, then it is called fixed charge v here as, if the debentures are secured against all the assets of a company, then it is called floating charge. In case the company fails to pay back the principal amount of debenture or fails to meet its interest obligations on the due date, then the debenture holders have the right to sell the mortgage asset in order to realise their amount due to the company.

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