Question

Shubh Limited has the following balances appearing in its Balance Sheet:

Securities Premium 22, 00,000

9% Debentures 1, 20,00,000

Underwriting Commission 10,00,000

The company decided to redeem its 9% Debentures at a premium of 10%. You are required to suggest the

ways in which the company can utilize the securities premium amount.​

Answer 1

1. writing off underwriting commission.

2. providing for the premium payable on redemption of debentures.