A customer purchases 10 PDQ Corporation 10% debentures, M '35, at 93 on Friday, June 12th, in a traditional way trade. The dates of interest payment are March 1 and September 1. The trade will settle on Wednesday, June 17th.
A debenture is a type of bond or other debt instrument which is unsecured by collateral. Since debentures don't have a collateral backup, they ultimately rely on the owner's creditworthiness and business reputation for help. Both businesses and governments often issue debentures to borrow capital or funds.
Like most bonds, debentures may create regular interest payments called coupon payments. Debentures are recorded in an indenture, which is a lawful and crucial agreement between bond issuers and bondholders. The contract says the characteristics of the debt offering, such as the maturity date, the timing of interest or coupon payments, the procedures of interest computation, and other characteristics. Businesses and governments can issue debentures as per their requirements.
Learn more about debentures:
https://brainly.com/question/13036443
#SPJ4
