CUET Preparation Today
| Discount on issue of debentures is recorded in the Balance Sheet as which of the following? |
An Asset "Other Current Assets" "Other non Current Assets" Either 2 or 3 |
| Either 2 or 3 |
| Discount on issue of debentures is a capital loss and is shown under the line item ‘Other Non-Current Assets’ or ‘Other Current Assets’ depending upon the time period in which it is to be written off. The discount on issue of debentures can be written off either by debiting it to Statement of Profit and Loss or out of Securities Premium Reserve A/c, 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’ |
