Interest payable on debenture is:

an appropriation of profits of the company

No worries! We‘ve got your back. Try BYJU‘S free classes today!

a charge against profits of the company

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

transferred to sinking fund account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

transferred to sinking fund interest account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C a charge against profits of the company
Interest on debentures is a charge against profits and, therefore, its payment is not subject to the earning of profits.The amount so deducted must be paid to the Central Government on behalf of the debenture-holders.

Suggest Corrections

Similar questions

Under Sinking Fund method, Sinking Fund or Debenture Redemption Fund of _______ the amount of present value of redemption amount of debentures is created out of profits every year.

Which account is to be debited to transfer interest on investment to debenture redemption fund?

Q. Any profit or loss on the sale of sinking (depreciation) fund investment is transferred to:

Q. The balance of sinking fund investment account after the realization of investment is transferred to:

Q. A sinking fund is created for the redemption of debentures of Rs 10,000 at the end of 25 years. How much money should be provided out of profits each year for the sinking fund if the investment can earn interest at the rate 4% per annum?

Join BYJU'S Learning Program

Interest payable on debenture is:

The correct option is C a charge against profits of the companyInterest on debentures is a charge against profits and, therefore, its payment is not subject to the earning of profits.The amount so deducted must be paid to the Central Government on behalf of the debenture-holders.

The correct option is C a charge against profits of the company
Interest on debentures is a charge against profits and, therefore, its payment is not subject to the earning of profits.The amount so deducted must be paid to the Central Government on behalf of the debenture-holders.