CUET Preparation Today
The Discount on issue of Debentures should be written off out of which of the following? |
Out of Securities Premium Account Out of P and L A/c Both 1 and 2 None of the above |
Both 1 and 2 |
The correct answer is option 3- Both 1 and 2. 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. |
