‘Interest paid on debentures is a charge against the profits of the company’. Is this statement correct? Give reason in support of your answer. (C.B.S.E. 2020, Kolkata, Lucknow) Post category:Accountancy Reading time:1 mins read SOLUTION Yes:Reason: Interest on debentures has to be paid whether the Company earns profit or incurs loss. Please Share This Share this content Opens in a new window Twitter Opens in a new window Facebook Opens in a new window Google+ Opens in a new window Pinterest Opens in a new window LinkedIn Opens in a new window Viber Opens in a new window VK Opens in a new window Reddit Opens in a new window Tumblr Opens in a new window Viadeo Opens in a new window WhatsApp Read more articles Previous PostWhy is premium on the issue of debentures considered a capital profit? Next PostPass the necessary journal entry when 10,000 debentures of Rs. 100 each are issued as collateral security against a Bank Loan of Rs. 8,00,000. You Might Also Like Do you think that Calls in Advance is a part of Share Capital? September 29, 2022 Nipa Limited issued Rs. 10,00,000 Debentures of Rs. 100 each at a premium of 10%, payable 25% on application (including premium) and the balance on allotment. The debentures were applied for and the amount was dully received. You are required to give Journal entries and prepare Cash Book. July 16, 2022 From the following information, calculate any two of the following ratios: (i) Current Ratio; (ii) Debt to Equity Ratio; and (iii) Operating Ratio. Revenue from Operations (Net Sales) Rs. 1,00,000; cost of Revenue from Operations (Cost of Goods Sold) was 80% of sales; Equity Share Capital Rs. 7,00,000; General Reserve Rs. 3,00,000; Operating Expenses Rs. 10,000; Quick Assets Rs. 6,00,000; 9% Debentures Rs. 5,00,000; Closing Inventory Rs. 50,000; Prepaid Expenses Rs. 10,000 and Current Liabilities Rs. 4,00,000. August 17, 2022 Leave a Reply Cancel replyYou must be logged in to post a comment.