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What is the nature of debenture interest? - Accounts

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Question

What is the nature of debenture interest?

Very Short Answer
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Solution

Interest on debentures is treated as a charge against the profits of the company. It is payable at a fixed rate and must be paid even when the company incurs a loss or does not earn enough profit.

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Chapter 7: Company Accounts - Issue of Debentures - SHORT ANSWER QUESTIONS [Page 7.53]

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D. K. Goel Accountancy Volume 1 and 2 [English] Class 12 ISC
Chapter 7 Company Accounts - Issue of Debentures
SHORT ANSWER QUESTIONS | Q 11. | Page 7.53
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