Debentures Are Backed by Specific Assets That Will Be Given

question 91

True/False

Debentures are backed by specific assets that will be given to bondholders if the borrowed amount is not repaid.

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Definitions:

Capital Lease

An accounting treatment for leases where the lessee records the leased property as if it was purchased, showing both an asset and a liability on the balance sheet for the lease obligation.

Residual Value

The projected amount an asset is expected to yield when sold after its period of usefulness has ended.

Contingent Rentals

Lease payments that are not fixed and determined but depend on a future event or condition.

Operating Lease

A lease agreement allowing the lessee to use an asset for a shorter period than the asset's useful life without ownership rights.