Question

A company has issued 11.5%
debentures of the face value of 100
each at 98. These debentures are
redeemable after three years at 102.
The loss on issue of each debenture is
740
O 34
O 2
0 12​

Answer 1

Answer:  The Loss on the issue of Debenture will be Rs 2.

Explanation:

Whenever a Debenture is issued at discount, it generates a loss for the company, since they are getting less than their expectation.

The Debenture has been issued at a discount of 2% each on the face of Rs 100. Since the issue is at discount, this will generate an entry of Loss on the issue of the debenture.

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