Question : Y Ltd. invited applications for issuing 500, 12% debentures of Rs.100 each at a discount of 5%. These debentures were redeemable after three years at par. Applications for 600 debentures were received. Pro-rata allotment was made to all the applicants assuming that the whole amount was payable with application.
Question:- Discount on issue of debenture account will be _____.
Option 1: Debited by Rs. 3,000
Option 2: Debited by Rs. 2,500
Option 3: Credited by Rs. 2,500
Option 4: Credited by Rs. 3,000
Correct Answer: Debited by Rs. 2,500
Solution : Answer = Debited by Rs. 2,500
Debit discount on issue of Debentures with Rs.500 X 5= Rs. 2,500. Hence, the correct option is 2.
Question : Y Ltd. invited applications for issuing 500, 12% debentures of Rs.100 each at a discount of 5%. These debentures were redeemable after three years at par. Applications for 600 debentures were received. Pro-rata allotment was made to all the applicants assuming that the
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