Issue of 8% debentures is shown under which sub-head in the balance sheet of a company.
Answer & explanation
Correct answer: option 1
The correct answer is option 1- Long term borrowings.
Issue of 8% debentures is shown under Long term borrowings sub-head in the balance sheet of a company.
NON-CURRENT LIABILITIES shall include the liabilities due after one year. It shall include the following:
- Long-term Borrowings: Such as Debentures, Loan from Bank, Loan from other parties.
- Deferred Tax Liabilities.
- Other Long term Liabilities: Such as Premium Payable on Redemption of Debentures; Premium Payable on Redemption of Preference Shares, Public Deposits (Unless specified, it will be assumed that deposits are for more than one year.)
- Long-term Provisions: Such as Provision for Employee Benefits, Provision for Provident Fund, Provision for Warranties.