Issue of Rs. 1,00,000, 9% debentures of Rs. 100 each at discount of 15% but redeemable at premium of 5%. the amount debited to loss on issue of debenture account is.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 20,000.
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Face value of debentures = ₹1,00,000
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Discount on issue = 15%
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Premium on redemption = 5%
Discount on Issue= 15% of 1,00,000 = 15,000
Premium on Redemption=5% of 1,00,000 = 5,000
Loss on Issue of Debentures=15,000+5,000 = 20,000