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Question
The following journal entry appears in the books of Latvion Ltd.:
| Date | Particulars | Dr. Amount (₹) |
Cr. Amount (₹) |
| Bank A/c ...Dr. | 4,75,000 | - | |
| Loss on issue of debentures A/c ...Dr. | 75,000 | - | |
| To 12% Debentures A/c | - | 5,00,000 | |
| To Premium on Redemption of Debentures A/c | - | 50,000 |
The discount on issue of debentures is ______.
Options
15%
5%
10%
95%
MCQ
Fill in the Blanks
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Solution
The discount on issue of debentures is 5%.
Explanation:
Discount on Issue of Debentures = Loss on Issue of Debentures – Premium on Redemption of Debentures
= ₹ 75,000 – 50,000
= ₹ 25,000
Rate of Discount on issue = `(₹ 25,000xx100)/(₹ 5,00,000)`
= 5%
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