Question : Loss/Discount or Loss on Issue of Debentures is written off from
Option 1: Securities Premium Reserve.
Option 2: Securities Premium Reserve (if it exists) and thereafter from Statement of Profit and Loss.
Option 3: Statement of Profit and Loss.
Option 4: General Reserve
Correct Answer: Securities Premium Reserve (if it exists) and thereafter from Statement of Profit and Loss.
Solution : Answer = Securities Premium Reserve (if it exists) and thereafter from Statement of Profit and Loss
Loss or discount on the issue of debentures is initially written off from the Securities Premium Reserve if it exists. If the amount exceeds the balance in the Securities Premium Reserve, the remaining portion is then charged to the Statement of Profit and Loss.
Hence, the correct option is 2.
