Question

Prepare Notes to Accounts of Finance Cost of Cosmo Ltd. for the year ended 31st March, 2026:

1. Interest paid on 9% Debentures ₹ 1,50,000;
2. Discount on Issue of Debentures 36,000;
3. Dividend paid ₹ 1,80,000;
4. Bank Charges ₹ 6,000;
5. Interest Received on Fixed Deposits ₹ 70,000;
6. Interest on Bank overdraft 28,000.

Hint: Bank Charges are included in ‘Other Expenses’, and Dividend is paid on shares and not on borrowings. Hence, it is not ‘Finance Cost’.

Answer 1

Notes to Accounts
Note No.	Particulars	Amount (₹)
1.	Finance Costs:
	(i) Interest paid on 9% Debentures	1,50,000
	(ii) Discount on Issue of Debentures	36,000
	(vi) Interest on Bank Overdraft	28,000
	Total Finance Costs	2,14,000