Sinking fund always shows
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always calculated on the face value of securities.
Explanation:
This fund is invested out-side the business in securities every year. The amount invested in securities is debited to 'Sinking Fund Investment, or Debenture Redemption Fund Investment Account. ... But the interest is always calculated on the face value of securities.
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But the interest is always calculated on the face value of securities. ADVERTISEMENTS: Until the debentures are paid off, the sinking fund appears in the liabilities side and the sinking fund investment on the assets side of the balance sheet. ... Profit or loss on sale of investments is transferred to sinking fund.
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