Identify those debentures out of the following options on which no explicit interest will be paid or provided by the company.
- ADebentures issued to underwriters
- BDebentures issued for cash
- CDebentures issued to vendor
- DDebentures issued as Collateral Security
Solution & Step-by-step Explanation
When a company issues debentures as Collateral Security against a primary bank loan, these debentures remain completely dormant. The bank only holds them as a secondary backup guarantee. No interest is paid on these collateral debentures. Interest is paid only on the active underlying bank loan.