On issue of debentures as a collateral security, which account is creadited?

Debentures Account

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Bank Loan Account

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Debenture holdings Account

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Debenture Suspense Account

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Solution

The correct option is A Debentures Account
Collateral security means security provided to the lender over and above the prime or principal security. Collateral security is to be realized only when the principal security fails to pay the amount of loan.
Debentures Suspense A/c Dr.
To Debentures A/c

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Similar questions

Q. In case of issue of debentures as collateral security, the effect in the Balance Sheet is nullified because balance of Debenture Suspense Account is deducted from Debentures Account.

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Q. X Ltd. obtained loan from IDBI of Rs. 10,00,000, giving as collateral security of Rs. 15,00,000, 14% Debenture on 1st April, 2011. Which of the following accounting treatments is correct to issue debenture as collateral security?

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On issue of debentures as a collateral security, which account is creadited?

The correct option is A Debentures AccountCollateral security means security provided to the lender over and above the prime or principal security. Collateral security is to be realized only when the principal security fails to pay the amount of loan.Debentures Suspense A/c Dr.To Debentures A/c

The correct option is A Debentures Account
Collateral security means security provided to the lender over and above the prime or principal security. Collateral security is to be realized only when the principal security fails to pay the amount of loan.
Debentures Suspense A/c Dr.
To Debentures A/c