A Ltd. issued 20,000 10% debentures of ₹100 each at a discount of 5% on April 01, 2022 which are redeemable at a 10% premium. It has a sufficient balance of securities premium reserve.
Calculate the amount to be written off from the securities premium reserve.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → ₹3,00,000
The loss on issue includes both the discount on issue and the premium payable on redemption. With a sufficient balance, the whole loss is written off from the Securities Premium Reserve.
Discount on issue = 20,000 × ₹100 × 5% = ₹1,00,000
Premium on redemption = 20,000 × ₹100 × 10% = ₹2,00,000
Loss on issue written off = ₹1,00,000 + ₹2,00,000 = ₹3,00,000
NCERT (2026-27 edition):
NCERT (2026-27 edition):
NCERT (2026-27 edition): |
