Identify the face value of the debenture
Identify the annual interest rate stated on the debenture
Determine the time period for which interest is to be calculated
Use the formula: Interest = Face Value × Interest Rate × Time
If the rate is annual and time is in months, convert months into years
If the debenture is issued or redeemed during the year, calculate interest for the exact period held
If interest is payable half-yearly or quarterly, divide the annual interest accordingly
For multiple debentures, multiply the interest per debenture by the number of debentures
If interest is paid net of tax, deduct tax as applicable from the gross interest
Record the calculated interest as a finance cost or interest expense in the accounts