Question

040.
A company has issued
11.5% debentures of
face value Rs. 100 at Rs
98. These debentures
are redeemable after 5
years at Rs. 102. The
loss on issue of
debenture is
A) Rs.4
B) Rs. 12
C) Rs.40
D) Rs. 2​

Answer 1

A company has issued

11.5% debentures of

face value Rs. 100 at Rs

98. These debentures

are redeemable after 5

years at Rs. 102. The

loss on issue of

debenture is

A) Rs.4

B) Rs. 12

C) Rs.40

D) Rs. 2

Answer 2

Answer:

Concept-

Loss on issue of debentures include the discount on issue of debentures and the premium on redemption of debentures.

Solution-

Discount on issue of debentures- Rs 2

Premium on redemption- Rs 2

Therefore, Loss on issue of debentures= 2+2= Rs 4