The correct answer is Option (1) → (A)-(IV), (B)-(III), (C)-(I), (D)-(II)
* Loss on Sale of Sinking Fund Investment - (IV) Debit in Sinking Fund Account.
The sinking fund is typically created to set aside funds for the repayment of a debt or other financial obligations. When there is a loss on the sale of a sinking fund investment, it is recorded as a debit entry in the Sinking Fund Account. This indicates a reduction in the value of the sinking fund due to the loss on the investment.
* Sinking Fund account - (III) Balance Sheet - Reserve & Surplus.
The Sinking Fund account is a reserve fund created to accumulate funds for a specific purpose, such as the repayment of a debt. It represents a part of the company's equity. The entry in the Balance Sheet under "Reserve & Surplus" reflects the amount of the sinking fund. This reserve is considered a part of the company's accumulated profits, contributing to the overall financial strength shown in the Balance Sheet.
* Reserve Capital - (I) Capital to be called up on winding up of the company.
Reserve Capital refers to the capital that is not distributable as dividends but can be called up if the company is winding up. It acts as a safety net for creditors. The entry under "Capital to be called up on winding up of the company" signifies that in the event of liquidation, the reserve capital may be called upon to meet any outstanding obligations or liabilities.
* Security Premium - (II) Writing off of discount allowed on any security of the company.
Security Premium is the amount received by a company in excess of the face value of securities issued. It is a form of additional consideration received from investors. The entry under "Writing off of discount allowed on any security of the company" suggests that any discount allowed on the issuance of securities is being gradually written off. This is typically done over the period during which the securities are outstanding. | 
