— Kishore V, SME and ACW at Edumarz
When a corporation issues debentures in addition to principal security, it is referred to as collateral securities. It will be treated in accounting in two ways: one by creating a Debenture Suspense Account, and the other by not opening one.
Two entries must be passed for Debenture Suspense, namely Bank A/ and Bank B/.
Particulars | Debit | Credit |
Bank A/c Dr To Bank Loan A/c |
Particulars | Debit | Credit |
Debenture Suspense A/c Dr To Debenture A/c |
Only one entry must be passed in the other procedure.
Particulars | Debit | Credit |
Bank A/c Dr To Bank Loan A/c |