10% debentures of ₹100, issued at ₹105 and redeemable at ₹110, what will be the loss on the issue of debentures to be debited at the time of issue?
Options:
₹5
₹10
₹15
₹25
Correct Answer:
₹10
Explanation:
Debenture Application & Allotment A/c Dr. 105 Loss on Issue of Debentures A/c Dr. (with premium on redemption) 10 To Debentures A/c (with nominal value of debenture) 100 To Securities Premium Reserve A/c (with premium on issue) 5 To Premium on Redemption of (with premium on redemption) 10