Question : Discount on issue of debenture is a
Option 1: Capital loss to be written off over the tenure of the debentures
Option 2: Revenue loss to be charged in the year of issue
Option 3: Capital loss to be written off from Capital Reserve
Option 4: Capital loss to be shown as goodwill
Correct Answer: Capital loss to be written off over the tenure of the debentures
Solution : According to ICAI standards, the discount on the issuance of debentures represents a capital loss that must be charged to the "Securities Premium Account" over the tenure of a debenture. The discount on the issuance of debentures may be written off by debiting either the securities premium account or the profit and loss account.
Hence the correct answer is option 1.
