Which of the Following Statements About a Debenture Holder Is

question 9

Multiple Choice

Which of the following statements about a debenture holder is NOT true?

• A)A debenture holder has the same rights as a shareholder of the company.
• B)A debenture holder is a secured creditor of the company.
• C)A debenture holder can sue the company for unpaid interest.
• D)A debenture holder can take action to have the company wound up.

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Definitions:

Bonds

Fixed-income securities that represent a loan made by an investor to a borrower, typically corporate or governmental, which pays periodic interest payments and the return of the principal at maturity.

Discount

A reduction applied to the normal selling price of goods or services, typically for the purpose of enticing customers or accelerating sales.

Journal Entry

A record in accounting that represents a transaction or adjustment affecting at least two accounts, which is necessary to keep the financial statements accurate.

Effective-Interest Method

An accounting technique used to amortize the discount or premium on bonds payable or receivable over the life of the bond, reflecting the bond's yield.