Video Lectures 
Study Material & Notes
According to Section 2(20) of the Companies Act, 2013, “Debenture includes debenture stock, bonds or any other instrument of a company evidencing a debt, whether constituting a charge on the assets of the company or not”
Debenture is a written instrument acknowledging a debt under the common seal of the company. It contains a contract for repayment of principal after a specified period or at intervals or at the option of the company and for payment of interest at a fixed rate payable usually either half-yearly or yearly on fixed dates.
Bond is also an instrument of acknowledgement of debt. In the Bond instead of rate of interest amount payable on maturity is mentioned.
It means any instrument other than debenture or bond issued by the Company substantiating borrowing. For example Company invites money from Pubic in the form of Pubic deposits
The persons to whom the debentures are issued, are called debenture holders. The debenture holders are not the owners of the company. They are the lenders of the company.
Video Lectures 
Discount on issue of debentures is netted off from Securities Premium Reserve (if it exists) or from the Statement of Profit & Loss Account in the year debentures are allotted
The liability of Premium on redemption arises the time of redemption of debentures. Being a known lability, following the prudence concept it is recorded on allotment of debentures itself
Debenture Face Value
Number of Debentures
9% per annum
Profit & Loss A/c
Loss Rs. 75,00,000
(10,000×100)x9%x6/12 = Rs. 45,000
Income Tax (TDS) @ 10%
45,000×10% = Rs. 4,500/-
Interest Net of TDS