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When debentures are issued as collateral security, the final entry for recording the collateraldebentures in the books is __________.
  • a)
    Credit Debentures A/c and debit Cash A/c.
  • b)
    Debit Debenture suspense A/c and credit Cash A/c.
  • c)
    Debit Debenture suspense A/c and credit Debentures A/c.
  • d)
    Debit Debentures A/c and credit Debenture suspense A/c
Correct answer is option 'C'. Can you explain this answer?
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When debentures are issued as collateral security, the final entry for...
Recording Collateral Debentures in the Books

When debentures are issued as collateral security, the final entry for recording the collateral debentures in the books is:

Debit Debenture suspense A/c and credit Debentures A/c.

Explanation:

- Debenture suspense A/c: This account is a temporary account used to record the collateral debentures until the underlying obligation is fulfilled. It is a nominal account and is debited to record the collateral debentures issued.
- Debentures A/c: This account is a real account that represents the collateral debentures issued. It is credited to record the collateral debentures.

The reason behind recording collateral debentures in Debenture suspense A/c is that the debentures are issued as collateral security, and their ownership remains with the issuer until the underlying obligation is fulfilled. Once the obligation is fulfilled, the collateral debentures are returned to the issuer, and the suspense account is closed by transferring the balance to the Debentures A/c.

In summary, the final entry for recording collateral debentures in the books is Debit Debenture suspense A/c and credit Debentures A/c.
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When debentures are issued as collateral security, the final entry for recording the collateraldebentures in the books is __________.a)Credit Debentures A/c and debit Cash A/c.b)Debit Debenture suspense A/c and credit Cash A/c.c)Debit Debenture suspense A/c and credit Debentures A/c.d)Debit Debentures A/c and credit Debenture suspense A/cCorrect answer is option 'C'. Can you explain this answer?
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When debentures are issued as collateral security, the final entry for recording the collateraldebentures in the books is __________.a)Credit Debentures A/c and debit Cash A/c.b)Debit Debenture suspense A/c and credit Cash A/c.c)Debit Debenture suspense A/c and credit Debentures A/c.d)Debit Debentures A/c and credit Debenture suspense A/cCorrect answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about When debentures are issued as collateral security, the final entry for recording the collateraldebentures in the books is __________.a)Credit Debentures A/c and debit Cash A/c.b)Debit Debenture suspense A/c and credit Cash A/c.c)Debit Debenture suspense A/c and credit Debentures A/c.d)Debit Debentures A/c and credit Debenture suspense A/cCorrect answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for When debentures are issued as collateral security, the final entry for recording the collateraldebentures in the books is __________.a)Credit Debentures A/c and debit Cash A/c.b)Debit Debenture suspense A/c and credit Cash A/c.c)Debit Debenture suspense A/c and credit Debentures A/c.d)Debit Debentures A/c and credit Debenture suspense A/cCorrect answer is option 'C'. Can you explain this answer?.
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