F A company issued 9 - Debentures of - 10-00-000 at 8 - discount- redeemable at par- The debentures are to be redeemed by drawings method in the following manner-0 - Year-end Amount Face Value - 2 1-00-000- 3 2-00-000- 4 3-00-000- 5 4-00-000 - Calculate the amount of discount on issue of debentures to be written off each year-

( Calculation of amount of Discount to be written off every year: Amount #160;of #160;Discount=10,00,000 #215;8 Year End Outstan ...

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Standard XII

Accountancy

Issued at a Discount and Redeemed at Par

F A company i...

Question

A company issued 9% Debentures of ₹ 10,00,000 at 8% discount, redeemable at par. The debentures are to be redeemed by drawings method in the following manner:
Year-end Amount (Face Value ) ( ₹)
2 1,00,000
3 2,00,000
4 3,00,000
5 4,00,000
Calculate the amount of discount on issue of debentures to be written off each year.

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Solution

(
Calculation of amount of Discount to be written off every year:

$Amount of Discount = 10, 00, 000 \times 8 % = Rs 80,000$

Year End

Outstanding Amount (Rs.)
Ratio
Discount

1

10,00,000
10 $80, 000 \times \frac{10}{40} = 20, 000$

2

10,00,000
10
$80, 000 \times \frac{10}{40} = 20, 000$

3

9,00,000
9
$80,000 \times \frac{9}{40} =18,000$

4

7,00,000
7
$80,000 \times \frac{7}{40} =14,000$

5

4,00,000
4
$80,000 \times \frac{4}{40} =8,000$

Total 40
80,000

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Year End	Outstanding Amount (Rs.)	Ratio	Discount
1	10,00,000	10	$80, 000 \times \frac{10}{40} = 20, 000$
2	10,00,000	10	$80, 000 \times \frac{10}{40} = 20, 000$
3	9,00,000	9	$80,000 \times \frac{9}{40} =18,000$
4	7,00,000	7	$80,000 \times \frac{7}{40} =14,000$
5	4,00,000	4	$80,000 \times \frac{4}{40} =8,000$
	Total	40	80,000