QUESTION $1$

The loan of money to a company, in whatever form it takes, forms part of a

company's external equity. It is a means whereby a company in need of funds

can obtain them $-$ a debenture is an example.

$($a$)$ Define a debenture.

$($b$)$ Name and describe the four classes of debenture.

$($c$)$ On $1$ May, XYZ Lid offered for subscription $5006\%$ debentures of R$100$

each at a price of R$95,$ payable in full on application. The whole issue was

subscribed and allotted, and the amounts due were paid before June.

Show the entries in the company's ledgers and journal.