Debenture suspense is shown in the balance sheet as:

Deduction from debenture

The correct answer is option 1- Deduction from debenture.

Debenture suspense is shown in the balance sheet as a deduction from debenture.

The issue of debentures as collateral security is shown by making the following journal entry: 
Debenture Suspense A/c Dr. 
           To Debentures A/c

*There is no change in debentures amount due to issue of debentures as collateral security. Only loan amount is shown in the balance sheet. Debentures suspense A/c is deducted from the amount of debentures in the balance sheet as debentures will not going to change.