Accountancy Part AIssue and Redemption of Debentures

Discount on issue of debentures to be written off within (A).........…

Discount on issue of debentures to be written off within (A)............ months of the balance sheet date or the period of operating cycle is shown under ‘Other Current Assets’ and the part which is to be written off after (B)........... months of balance sheet is shown under ‘Other Non-Current Assets’.

Answer & explanation

Correct answer: option 1

The correct answer is Option (1) → (A)12 months; (B)12 months

NCERT (2026-27 edition):
Issue of Debentures at a Discount – “When a debenture is issued at a price below its nominal value, it is said to be issued at a discount. For example, the issue of Rs. 100 debentures at Rs. 95, Rs. 5 being the amount of discount. The discount on issue of debentures can be written off either by debiting it to or out of Securities Premium Reserve, if any, during the life time of debentures. Discount on issue of debentures to be written off within 12 months of the balance sheet date or the period of operating cycle is shown under ‘Other Current Assets’ and the part which is to be written off after 12 months of balance sheet is shown under ‘Other Non-Current Assets’.”