Debentures on which a company does not give any undertaking for the repayment of money borrowed are called:
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Perpetual or Irredeemable Debentures are unique because the company doesn't promise to repay the principal amount at a specific future date during its operational life. Repayment usually happens only upon liquidation or breach of certain conditions.
In accountancy, debentures are instruments used by corporations to raise debt capital. The question pertains to identifying a specific type of debenture where the company doesn't commit to repaying the borrowed money. This is known as a Perpetual Debenture.
Here's why Perpetual Debentures are the correct answer:
Perpetual Debentures: These instruments do not have a maturity date, meaning the company does not promise to repay the principal amount at any specific time, instead providing interest payments indefinitely. As such, they fall under securities lacking a specific commitment for repayment of the principal.
Bearer Debentures: Unlike perpetual debentures, these involve physical possession for claims but typically have a maturity for repayment.
Secured Debentures: These are backed by the company's assets and involve scheduled repayments.
Registered Debentures: Issued in the name of the holder, ensuring the repayment is recorded and guaranteed.
Thus, among the options provided, only Perpetual Debentures align with the criterion of no repayment undertaking, making it the correct choice.
