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Question
| Floater Ltd. issued 60,000; 8% debentures of ₹ 100 each at 5% Discount and to be redeemed at 10% premium at the end of 5 years. On the date of issue, balance in Securities Premium was ₹ 8,00,000 and Statement of Profit Loss (Dr.) was ₹ 5,00,000. |
Loss on Issue of Debentures is to be written off as ______ out of Securities Premium and ______ out of Statement of Profit and Loss.
Options
₹ 4,50,000; ₹ 4,50,000
₹ 6,00,000; ₹ 3,00,000
₹ 8,00,000; ₹ 1,00,000
₹ 4,00,000; ₹ 5,00,000
MCQ
Fill in the Blanks
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Solution
Loss on Issue of Debentures is to be written off as ₹ 8,00,000 out of Securities Premium and ₹ 1,00,000 out of Statement of Profit and Loss.
Explanation:
Discount on issue (5%):
= 100 × 5%
= ₹ 5
Premium on redemption (10%):
= 100 × 10%
= ₹ 10
Total loss per debenture:
= 5 + 10
= ₹ 15
Total number of debentures = 60,000
Total Loss = 60,000 × 15
= ₹ 9,00,000
Securities Premium balance = ₹ 8,00,000
Remaining loss to be shifted to Statement of P/L
9,00,000 − 8,00,000
= 1,00,000
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