Question

Arihant Ltd secured a loan of Rs 1,60,000 from Punjab National Bank issuing 2,000; 9% debentures of Rs 100 each as collateral security. how will you show issue of debentures in the balance sheet ? ​

Answer 1

Answer:

Issue of Debentures for Cash Debentures, like shares, issued for cash, may be issued

(i)at par (ii) at premium or (iii) at discount

(iv) Issue of Debentures at Par Debentures are said to be issued at par when the issue price and face value of the debentures is same.

(v)Issue of Debentures at a Premium Debentures are said to be issued at premium when the issue price is more than the face value.

(vi)Issue of Debentures at a Discount Debentures are said to be issued at discount when they are issued at a price below its nominal or face value.

Explanation: