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Question -

A.Ltd. Issued 50, 00,000, 8% Debenture of ₹ 100 at a discount of 6% on April 01, 2009 redeemable at premium of 4% by draw of lots as under:
20, 00,000 Debentures on March, 2011
10, 00,000 Debentures on March, 2013
20, 00,000 Debentures on March, 2014
Compute the amount of discount to be written-off in each year till debentures are paid. Also prepare discount/loss on issue of debenture account.



Answer -

Loss on issue ofdebenture = 6% (discount on issue) + 4% (premium on redemption) = 10%

At the end of

Debenture Outstanding

Ratio

Loss to be written off every year

March 2010

50,00,00,000

5

=

1,38,88,889

March 2011

50,00,00,000

5

=

1,38,88,889

March 2012

30,00,00,000

3

=

83,33,333

March 2013

30,00,00,000

3

=

83,33,333

March 2014

20,00,00,000

2

=

55,55,556

18

Rs 5,00,00,000

Loss on Issue of Debenture Account

Dr.

 

 

 

 

 

 

Cr.

Date

Particulars

J.F.

Amount

₹

Date

Particulars

J.F.

Amount

₹

2009

April 01

Debenture

5,00,00,000

2010

March 31

Profit and Loss

1,38,88,889

Balance c/d

3,61,11,111

5,00,00,000

5,00,00,000

2010

April 01

Balance b/d

3,61,11,111

2011

March 31

Profit and Loss

1,38,88,889

Balance c/d

2,22,22,222

3,61,11,111

3,61,11,111

2011

April 01

Balance b/d

2,22,22,222

2012

March 31

Profit and Loss

83,33,333

Balance c/d

1,38,88,889

2,22,22,222

2,22,22,222

2012

April 01

Balance b/d

1,38,88,889

2013

March 31

Profit and Loss

83,33,333

Balance c/d

55,55,556

1,38,88,889

1,38,88,889

2013

April 01

Balance b/d

55,55,556

2014

March 31

Profit and Loss

55,55,556

55,55,556

55,55,556

 

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