Question : Ashwathi Ltd. issued 40,00,000, 10% Debentures of Rs.50 each at a discount of 8% on April 1, 2010, redeemable in four equal annual instalments starting with March 31, 2013. Securities premium account shows a balance of Rs.70,00,000. Compute the amount of discount/loss to be written off through statement of profit and loss account is –
Option 1: Rs 1.6 cores
Option 2: Rs 0.09 crores
Option 3: Rs 0.9 crores
Option 4: Rs 16 crores
Correct Answer: Rs 0.9 crores
Solution : Answer = Rs 0.9 crores Discount on issue of debentures(40,00,000@50 each)= 20,00,00,000×8%= 1,60,00,000. Securitites premium reserve A/c.......Dr 70,00,000 Surplus in the statement of P&L A/c........Dr 90,00,000 To Discount on issue of debentures A/c 1,60,00,000 Hence, the correct option is 3.
Question :
Citizen Ltd. issued 10,000, 6% Debentures of Rs. 100 each at a discount of 10% redeemable at 10% premium. It has Securities Premium Reserve of Rs. 1,75,000. Loss on Issue of Debentures Rs. 2,00,000 will be written off by passing the following entry
Option 1: Debited securities premium with Rs 1,75,000 and credited loss on issue of debenture account Rs 1,75,000
Option 2: Debited securities premium reserve account with Rs 1,75,000 and debited surplus in profit and loss account Rs 25,000 and credited loss on issue of debenture account Rs 2,00,000
Option 3: Debited surplus in statement of profit and loss account Rs 2,00,000 and credited loss on issue of debentures account
Option 4: None of these
Intel Ltd. issued 10,000, 7% Debentures of Rs. 100 each at a discount of 10%. It has Securities Premium Reserve of Rs.1,50,000.Discount on Issue of Debentures, i.e., Rs. 1,00,000 will be written off by passing the following entry
Option 1: Securities premium account debited by Rs 1,00,000 and credited discount on issue of debentures account
Option 2: Debited profit and loss account and credited discount on issue of debenture account by Rs 1,00,000
Option 3: Debited profit and loss adjustment account and credited discount on issue of debenture account
Option 4: None of theses
Question : Home Products Ltd. issued on 1st April, 2019,10,000,9% Debentures of Rs. 100 each at a premium of 10% redeemable at a premium of 5% after 5 years. Issue price was payable along with application. Which of the following statements is correct?
Option 1: Loss on issue of debenture account will be debited by Rs. 50,000
Option 2: Premium on Redemption of Debentures account credited by Rs. 50,000
Option 3: Premium of Redemption of Debentures account will be credited by Rs. 1,00,000
Option 4: Securities premium account will be credited by Rs. 1,00,000
Question : Home Products Ltd. issued on 1st April, 2019, 10,000, 9% Debentures of Rs. 100 each at a premium of 10% redeemable at a premium of 5% after 5 years. Issue price was payable along with application. Which of the following statements is correct?
Option 1: Loss on issue of debentures account will be debited by Rs. 1,00,000
Option 2: Loss on issue of debentures account credited by Rs. 50,000
Option 3: Loss on issue of debentures account are to be written off from securities premium account by Rs. 50,000
Option 4: Premium on Redemption of debentures debited by Rs. 50,000
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