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Question :

Intel Ltd. issued 10,000, 7% Debentures of  Rs. 100 each at a discount of 10%. It has Securities Premium Reserve of Rs.1,50,000.Discount on Issue of Debentures, i.e.,  Rs. 1,00,000 will be written off by passing the following entry

 

Option 1: Securities premium account debited by Rs 1,00,000 and credited discount on issue of debentures account 

Option 2: Debited profit and loss account  and credited discount on issue of debenture account by Rs 1,00,000

Option 3: Debited profit and loss adjustment account and credited discount on issue of debenture account 

Option 4: None  of theses 


Team Careers360 15th Jan, 2024
Answer (1)
Team Careers360 21st Jan, 2024

Correct Answer: Securities premium account debited by Rs 1,00,000 and credited discount on issue of debentures account


Solution : Answer = Securities premium  account debited by Rs 1,00,000 and credited discount on issue of debentures account

(10,00,000×10%)

Discount on issue of debentures  = Rs 1,00,000.

JOURNAL ENTRY

Securities Premium Reserve A/c Dr                      1,00,000

To Discount on issue on Debentures A/c                           1,00,000

Hence, the correct option is 1.

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