explain the following terms and kindly name the major heads and sub heads in which they will appear:
1.interest accrued and due on debentures
2.interest accrued but not due on debentures
Hi Shri Lakshmi
​Both of them appears under the Liabilities side under the head 'Other Current Liabilities'.
1. Interest accrued and due on debentures: It means interest is provided in the books and is due for payment but it is not paid.
For example, interest on debentures is payable half yearly in September 30 and March 31. So, at the time of closing of books on March 31, interest is accrued for the second half year and payable to debentureholders. Therefore, it is shown under 'other current liabilities'.
2. Interest accrued but not due on debentures: It means interest is accrued and provided in the books but it has not become due for payment.
For example, if interest on debentures is payable in June 30 and December 31. At the time of closing of books on March 31, interest is accrued for 3 months (i.e. from Jan 01 - March 31) as per the accrual basis of accounting but it will become due for payment on June 30. Therefore, such an interest will be regarded as 'Interest accrued but not due' and will be shown under 'other current liabilities'.
​Both of them appears under the Liabilities side under the head 'Other Current Liabilities'.
1. Interest accrued and due on debentures: It means interest is provided in the books and is due for payment but it is not paid.
For example, interest on debentures is payable half yearly in September 30 and March 31. So, at the time of closing of books on March 31, interest is accrued for the second half year and payable to debentureholders. Therefore, it is shown under 'other current liabilities'.
2. Interest accrued but not due on debentures: It means interest is accrued and provided in the books but it has not become due for payment.
For example, if interest on debentures is payable in June 30 and December 31. At the time of closing of books on March 31, interest is accrued for 3 months (i.e. from Jan 01 - March 31) as per the accrual basis of accounting but it will become due for payment on June 30. Therefore, such an interest will be regarded as 'Interest accrued but not due' and will be shown under 'other current liabilities'.