What is the nature of Interest on Debentures? Post category:Accountancy Reading time:1 mins read SOLUTION Interest on debentures is a charge against the profit which means interest on debentures shall always be paid whether profits are sufficient or not. Please Share This Share this content Opens in a new window X Opens in a new window Facebook 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 PostAmount raised by a company by debenture is loan or capital? Next PostGive any two points of distinction between a Share and a Debenture. You Might Also Like From the following Balance Sheet of Long and Short, calculate interest on capital @ 8% p.a. for the year ended 31st March, 2019. Balance sheet as at 31st March, 2019. July 21, 2022 What is meant by the term ‘Cash Flows’? (C.B.S.E. 2020, Kerala) October 4, 2022 Ali the Bahadur are partners in a firm sharing profits and losses as Ali 70% and Bahadur 30%. Their respective capitals as at 1st April, 2018 stand as Ali Rs. 25,000 and Bahadur Rs. 20,000. The partners are allowed interest on capitals @ 5% p.a. Drawings of the partners during the year ended 31st March, 2019 amounted to Rs. 3,500 and Rs. 2,500 respectively. Profit for the year, before charging interest on capital and annual salary of Bahadur @ Rs. 3,000, amounted to Rs. 40,000, 10% of divisible profit is to be transferred to Reserve. You are asked to show Partners’ Current Account and Capital Accounts recording the above transactions. July 21, 2022 Leave a Reply Cancel replyYou must be logged in to post a comment.
From the following Balance Sheet of Long and Short, calculate interest on capital @ 8% p.a. for the year ended 31st March, 2019. Balance sheet as at 31st March, 2019. July 21, 2022
Ali the Bahadur are partners in a firm sharing profits and losses as Ali 70% and Bahadur 30%. Their respective capitals as at 1st April, 2018 stand as Ali Rs. 25,000 and Bahadur Rs. 20,000. The partners are allowed interest on capitals @ 5% p.a. Drawings of the partners during the year ended 31st March, 2019 amounted to Rs. 3,500 and Rs. 2,500 respectively. Profit for the year, before charging interest on capital and annual salary of Bahadur @ Rs. 3,000, amounted to Rs. 40,000, 10% of divisible profit is to be transferred to Reserve. You are asked to show Partners’ Current Account and Capital Accounts recording the above transactions. July 21, 2022