Suvidha Ltd. was on the verge of expansion. It was requiring ₹40 lakhs for modernisation of its Machinery. It decided to issue Rs.30 lakhs, 7% debentures to public for cash and to borrow ₹10 lakhs from SBI Bank as long term loan, with a condition from SBI to issue ₹12 lakhs. 7% debentures as a subsidiary security besides the primary security, to which the company agreed. The face value of 7% debenture was ₹100.

Under which Major head in Balance Sheet, debentures and bank loans are shown.

Non current liabilities

The correct answer is option 3- Non-current liabilities.

These liabilities represent obligations that are not expected to be settled within the operating cycle of the business or within one year from the balance sheet date. Debentures and bank loans usually have a maturity period of more than one year, so they are classified as non-current liabilities on the balance sheet.