On May 01, 2025 Kaur Ltd. issued 10,000, 8% debentures of Rs. 100 each at a discount of 10% redeemable at a premium of 10%. The issue was fully subscribed and the amount was duly received. Calculate the amount of loss on issue of debentures.

Rs. 2,00,000

Correct answer: Option (2) → Rs. 2,00,000

Concept: Loss on Issue of Debentures when debentures are issued at a discount and redeemable at a premium, per Issue and Redemption of Debentures.

Nominal (face) value = 10,000 × Rs. 100 = Rs. 10,00,000.
Discount on issue @ 10% = 10,00,000 × 10% = Rs. 1,00,000.
Premium payable on redemption @ 10% = 10,00,000 × 10% = Rs. 1,00,000.
Loss on issue = Discount on issue + Premium payable on redemption = 1,00,000 + 1,00,000 = Rs. 2,00,000.