Sindoor Ltd. issued Rs. 75,00,000, 9% debentures of Rs. 100 each as collateral security to State Bank of India against loan of Rs. 80,00,000. What amount will be shown in the long term borrowings in Balance Sheet in this case?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 80,00,000
Debentures issued as collateral security only give the bank an extra security for its loan. The company has borrowed once, so only the loan is shown as a long term borrowing.
Loan from State Bank of India = Rs. 80,00,000
Debentures as collateral: no entry, or Debentures Rs. 75,00,000 less Debentures Suspense Rs. 75,00,000 = nil
Long term borrowings = Rs. 80,00,000
Adding the debentures to the loan (Rs. 1,55,00,000) would count the same borrowing twice.
Note: NTA picked this question from an NCERT (2026-27) illustration and changed the figures. Do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
|
