Question : On 1st April, 2018, RJ. Ltd. issued Rs. 10,00,000, 9% Debentures of Rs. 100 each at a discount of 10%. These debentures were redeemable at a premium of 5% after four years. Premium on Redemption of Debentures debited/credited with ______.
Option 1: Credited with Rs. 20,000
Option 2: Debited with Rs. 50,000
Option 3: Credited with Rs. 50,000
Option 4: None of the above
Correct Answer: Credited with Rs. 50,000
Solution : Answer = Credited with Rs. 50,000
Premium on Redemption of debenture account will be credited by Rs. 50,000.
Rs. 10,00,000 X 5% = Rs. 50,000.