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Question
Nori Ltd. issued 20,000, 11% debentures of ₹ 100 each at a premium of 10%, redeemable at a premium of 5%. Loss on issue of debentures account will be debited by:
Options
₹ 20,00,000
₹ 1,00,000
₹ 3,00,000
₹ 2,00,000
MCQ
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Solution
₹ 1,00,000
Explanation:
Number of Debentures Issued: 20,000
Face Value per Debenture: ₹ 100
Premium on Redemption: 5% of Face Value = 5% of 100 = 5 per debenture
Total Loss on Issue: Number of Debentures × Premium of Redemption
20,000 × 5 = 1,00,000
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