1.

Give the journal entries to be passed when : (a) Interest is due on debentures. (b) Interest is paid to debenture holders.

Answer»

(a) Interest on Debentures A/c Dr. 

To Debentures holders A/c 

To Income Tax Payable A/c 

(Being the Interest due to debenture holders and tax payable to Income tax Dept.)

(b) Debenture holders A/c Dr. 

To Bank A/c 

(Being the amount of interest paid to debenture holders)


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