Debentures are long-term debt instruments issued by company to raise capital. Key features: Fixed rate of interest, Fixed maturity date, Senior claim over equity holders, Generally not voting rights, Can be secured (on assets) or unsecured. Types: Convertible Debentures (convertible to equity shares at maturity), Non-Convertible (remain debt till maturity), Callable (company can redeem early), Putable (debenture holder can demand redemption). Accounting Treatment: Issued at Par: Debit Bank, Credit Debentures Account. Issued at Premium: Debit Bank, Credit Debentures, Credit Debenture Premium (to Securities Premium Reserve). Issued at Discount: Debit Bank, Debit Debenture Discount (to P&L over life of debentures), Credit Debentures. Interest on Debentures: Expense to company, deductible for tax purposes. Journal Entry: Debit Interest Expense, Credit Interest Payable. Discount Amortization: Debenture discount amortized over life. Journal Entry: Debit Interest Expense, Credit Debenture Discount. Balance Sheet Presentation: Shown under Non-Current Liabilities, Discount shown as deduction from Debentures, Interest Payable shown as Current Liability. Redemption/Maturity: At maturity, debentures redeemed (paid back). Journal Entry: Debit Debentures, Credit Bank. Conversion (if applicable): Debit Debentures, Credit Share Capital, Credit Securities Premium. Exam tip: Understand the nature of debentures as debt; master journal entries for issue at par, premium, and discount; know the interest treatment; practice redemption and conversion entries; distinguish from equity instruments.