MANAGEMENT

Detailed explanation-1: -A Debenture Redemption Reserve is not required for privately placed debentures by NBFCs registered with RBI under section 45-IA of the Reserve Bank of India Act, 1934 and Housing Finance Companies registered with the National Housing Bank.

Detailed explanation-2: -Solution. The face value and the carrying amount of debentures are equal. Explanation: The face value and carrying amount of 10% debentures issued at a 20% discount are the same.

Detailed explanation-3: -Return on investment in debentures ranges from 7% to 10% if held till maturity. Interest payments in debentures are made either monthly, quarterly, half-yearly, or annually. Moreover, unsecured NCDs can offer a higher interest rate.

Detailed explanation-4: -Interest on debenture is a charge opposite to the profit of the enterprise and has to be paid whether the enterprise has acquired any profit. According to the Income Tax Act, 1961, an enterprise must deduct income tax at the recommended rate from the interest payable on debentures if it surpasses the guided limit.