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
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.
Citizen Ltd. issued 10,000, 6% Debentures of Rs. 100 each at a discount of 10% redeemable at 10% premium. It has Securities Premium Reserve of Rs. 1,75,000. Loss on Issue of Debentures Rs. 2,00,000 will be written off by
Question : Home Products Ltd. issued on 1st April, 2019,10,000,9% Debentures of Rs. 100 each at a premium of 10% redeemable at a premium of 5% after 5 years. Issue price was payable along with application. Which of the following statements is correct?
Question : KTR Ltd., issued 365, 9% Debentures of Rs. 1,000 each on 4th March, 2016 at 6% discount, redeemable at 5% premium. Loss on issue of Debentures debited/credited with _____________.
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