Based on following, answer question.

XYZ Ltd. has been operating in the field of FMCG products in South Indian market. However to expand its operation in northen part of India, it needs additional capital ₹20,00,000 which is raised by issuing 10% Debenture of ₹12,00,000 of ₹100 issued at a discount of 10% to be repayable after 6 years. The rest of the funds is raised by issuing 5% debenture of ₹8,00,000 of ₹100 issued at 15% premium. These debentures are perpetual in nature. After six years of successful operation in northern India, company took a loan of ₹5,00,000 from PNB against 5% debenture of ₹8,00,000 of ₹100 each as a collateral security. The company successfully ran its operation and managed to pay off its loan within two years.

While issuing 10% debentures of ₹12,00,000 at a discount of 10%. What amount should be transferred to a discount on the issue of debentures A/c if all the amount is received in one installment?

₹120000

10% debentures of ₹12,00,000 at a discount of 10%.
10% discount = 1200000 x 10/100
                      = 120000
This amount is a capital loss for the company and goes in discount on the issue of debentures A/c.