A company issues 1000 9% debentures of ₹100 each at a premium of 5% and redeemable at a premium of 10%. The amount of loss on issue of debentures account will be:

₹10,000

The correct answer is option 2- ₹10,000.

Journal entry on receiving application money-
Bank A/c Dr.                                                            ₹1,05,000 (1000 x 105)
          To Debenture Application & Allotment A/c                   ₹1,05,000 (1000 x 105)
(Receipt of application money)

Journal entry on transferring application money-
Debenture Application & Allotment A/c Dr.                                           ₹1,05,000 (1000 x 105)
Loss on Issue of Debentures A/c Dr. (with premium on redemption)  ₹10,000     (1000 x 10)
    To Debentures A/c (with nominal value of debenture)                                        ₹1,00,000 (1000 x 100)
    To Securities Premium Reserve A/c (with premium on issue)                              ₹5,000 (1000 x 5)
    To Premium on Redemption of Debentures A/c (with premium on redemption)  ₹10,000 (1000 x 10)

Thus, the amount of loss on issue of debentures account will be 10,000.