Treatment of interest on debentures in company's balance sheet?
Dear student,
While paying interest to debenture holders the journal entry would be:
So the amount would be posted in bank a/c.Hence the amount will be considered in bank balance.Balance of bank account would fall under head cash and cash equivalents in company's balance sheet. This is the treatment of interest on debentures in company's balance sheet.
Regards
While paying interest to debenture holders the journal entry would be:
| Date | Particulars | LF | Debit amount | Credit Amount |
| Debenture holder's a/c Dr To Bank a/c |
So the amount would be posted in bank a/c.Hence the amount will be considered in bank balance.Balance of bank account would fall under head cash and cash equivalents in company's balance sheet. This is the treatment of interest on debentures in company's balance sheet.
Regards