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Question -

B. Ltd. issued debentures at 94% for ₹ 4, 00,000 on April 01, 2011 repayable by five equal drawings of ₹ 80,000 each. The company prepares its final accounts on March 31 every year.
Indicate the amount of discount to be written-off every accounting year assuming that the company decides to write-off the debentures discount during the life of debentures. (Amount to be written-off: 2012 ₹ 8,000; 2013 ₹ 6,400; 2014 ₹ 4,800; 2015 ₹ 2,000; 2016 ₹ 1,600).



Answer -



Amount of discount to written off every year
In 2012 = ₹8,000
In 2013 = ₹6,400
In 2014 = ₹4,800
In 2015 = ₹3,200
In 2016 = ₹1,600

WorkingNotes:

Year

Debentures Outstanding

Ratio

Months

New Ratio (Ratio × Months)

Amounts written off

2012

Apr-Mar

3,20,000

5

12

60

24,000×60180=₹8,00024,000×60180=₹8,000

2013

Apr-Mar

2,40,000

4

12

48

24,000×48180=₹6,40024,000×48180=₹6,400

2014

Apr-Mar

1,60,000

3

12

36

24,000×36180=₹4,80024,000×36180=₹4,800

2015

Apr-Mar

80,000

2

12

24

24,000×24180=₹3,20024,000×24180=₹3,200

2016

Apr-Mar

80,000

1

12

12

24,000×12180=₹1,60024,000×12180=₹1,600

180
Important Note: As per NCERT textbook, ₹2,000 discount has been written off in the year 2015 which is incorrect because then the total discount amounts to ₹22,800. Therefore, it should be ₹3,200. 

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