Question

When debentures are issued as collateral security,

Options

• Following entry is passed:

  Debenture Suspense A/c   ...Dr.
       To ...% Debentures A/c

• No entry may be passed.

• Either (a) or (b).

• None of the above.

Answer 1

Either (a) or (b).

Explanation:

When debentures are issued as collateral security, the company may either pass the Debenture Suspense A/c Dr. to Debentures A/c entry or make no journal entry and disclose it by way of a note.