Question

write the accounting treatment of loss on issue of debenture in the final accounts of a listed company​

Answer 1

Answer:

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.

When debentures are issued at premium, the amount of premium is credited to Debenture Premium Account. Debenture Premium Account is a capital profit and is transferred to Capital Reserve Account. When debentures are issued at discount, the amount of discount is debited to 'Discount on Issue of Debentures Account.