Question

27. A Ltd. issued 1,00,000 Debentures at a discount of 6% on 1st Jan., 2015 repayable at the end
of 5th year. Discount written off is-
(a) 6,000 in first year
(b) 6,000 in 5th year
(c) 1,200 every year
(d) * 3,000 each in 1st and 5th year​

Answer 1

ion:

Amount of discount to be written off from Statement of Profit and Loss every year:

Nominal Value of Debentures = 3,000 × ` 100 each

= ` 3,00,000

5% Discount on Issue of Debentures i.e., ` 15,000.

Discount on Issue of Debentures to be written off each year = 15,000

5

` = ` 3,000.

Note: Debentures are to be redeemed on maturity, i.e., at the end of 5 years. Therefore, Discount on

Issue of Debentures is written off equally in 5 years.

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