Interest on debenture is a ............ against the profit of the company and must be paid whether the company has earned any profit or not.
Interest on debenture is a ............ against the profit of the company and must be paid whether the company has earned any profit or not.
Solution
✅ Correct Option: 1
Debenture holders are creditors, not owners, so their interest is a contractual cost payable irrespective of profits. Such a compulsory payment is a charge against profit and is debited to the Statement of Profit and Loss, unlike dividend which is an appropriation.
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