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A company took a loan of ₹200000 from a bank and placed with the bank debenture for ₹250000 as collateral securities. show how they will appear in the company 's blance sheet
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A company took a loan of ₹200000 from a bank and placed with the bank ...
Balance Sheet Presentation of Loan and Debenture in Company's Balance Sheet
1. Loan from Bank:
- In the liabilities side of the balance sheet, the company will show the loan amount of ₹200000 under the head 'Long-term Liabilities' or 'Non-current Liabilities'.
- The loan will be classified as a liability that the company owes to the bank and will be shown as a separate line item in the balance sheet.
2. Debenture as Collateral Security:
- In the assets side of the balance sheet, the company will show the debenture of ₹250000 as collateral security under the head 'Investments' or 'Non-current Assets'.
- The debenture will be classified as an asset that the company has deposited with the bank as collateral and will be shown as a separate line item in the balance sheet.
3. Overall Impact on Balance Sheet:
- The loan will increase the total liabilities of the company, while the debenture will increase the total assets of the company.
- The balance sheet will reflect a higher total asset value due to the inclusion of the debenture as collateral security, which helps in strengthening the financial position of the company.
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A company took a loan of ₹200000 from a bank and placed with the bank ...
Debenture suspense a|C ₹250000
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A company took a loan of ₹200000 from a bank and placed with the bank debenture for ₹250000 as collateral securities. show how they will appear in the company 's blance sheet Related: Question and Solution of Issue of Debenture (Part - 3)?
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