Interest payable on debentures is called?
Answer & explanation
Correct answer: option 2
Interest payable on debentures is indeed considered a charge against the profits of the company. When a company issues debentures, it incurs a financial obligation to pay interest to the debenture holders at a predetermined rate. This interest expense is considered a cost of borrowing for the company and is deducted from the company's profits when calculating its net income.