T Ltd. issued 50,000, 12% Debentures of ₹100 each at a discount of 5% repayable at premium of 10% at the end of 5 year. Calculate the Loss on Issue of Debentures.
Answer & explanation
Correct answer: option 4
The correct answer is option 4- ₹7,50,000.
Debentures = 50,000
Face value of debenture = 100
Discount = 5%
Premium on redemption = 10%
Discount on issue = 50,00,000 x 5/100
= 2,50,000
Premium on redemption = 50,00,000 x 10/100
= 5,00,000
Total Loss on issue of Debentures = 2,50,000 + 5,00,000
= 7,50,000