Question

discount or loss on issue of debenture is an example of​

Answer 1

Explanation:

The loss or discount on the issue of debentures is typically a capital loss or a fictitious asset and, hence, has to be written-off during the debentures' lifetime.

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Answer 2

Answer:

The loss or discount on the issue of debentures is typically a capital loss or a fictitious asset and, hence, has to be written-off during the debentures lifetime. The amount of loss or discount on issue of debentures has to be not be written-off during the year of its issue since the benefit of the debentures would accumulate to the enterprise till their restitution or redemption.

The loss or discount, hence, considered as a capital loss. The discount might be charged to either Securities Premium A/c or might be written-off over three to five years via the statement of Profit and Loss as per guidance circulated by ICAI (The Institute of Chartered Accountants of India).

If there are no capital profits or if the capital profits are insufficient, the amount of such loss or discount can be written-off against the revenue profits each year by passing the below-mentioned journal entry :

Statement of Profit and Loss                         Dr.

             To Discount/Loss on Issue of Debentures A/c

(Discount/loss on issue of debentures written-off)