Question

Zeba Limited issued 15,000, 9% debentures of ₹ 100 each at 10% discount on 1^st April, 2023. It has a balance of ₹ 1,00,000 in Securities Premium Account. The ‘Discount on issue of Debentures’ of ₹ 1,50,000 will be written off:

Options

• ₹ 1,00,000 out of Securities Premium Account and ₹ 50,000 out of Statement of Profit and Loss.

• ₹ 50,000 out of Securities Premium Account and ₹ 1,00,000 out of Statement of Profit and Loss.

• ₹ 1,50,000 out of Securities Premium Account.

• ₹ 1,50,000 out of Statement of Profit and Loss.

Answer 1

₹ 1,00,000 out of Securities Premium Account and ₹ 50,000 out of Statement of Profit and Loss.

Explanation:

Discount on Issue of Debentures = ₹ 15,00,000 × 10% 

= ₹ 1,50,000

Adjustment: Written off from Security Premium = ₹ 1,00,000

Written off from Statement of Profit and Loss = ₹ 50,000