If a debenture of Rs.200 is issued for Rs.197, The discount allowed is debited to a separate account known as:

Discount on Issue of Debentures Account

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Discount at the time of Allotment

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Securities premium Account

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None of the above

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Solution

The correct option is A Discount on Issue of Debentures Account
If a debenture of Rs.200 is issued for Rs.197, The discount allowed is debited to a separate account known as Discount on Issue of Debentures Account

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Similar questions

Which account needs to debited for writing off discount on issue of debentures over the span of debentures?

J Ltd issued Rs 20,00,000, $15 %$ Debentures at $8 %$ discount. Debentures are to be redeemed in the following manner :

$\begin{matrix} Year-end & Face value of Debentures Rs 2 & 2, 00, 000 3 & 4, 00, 000 4 & 6, 00, 000 5 & 8, 00, 000 \end{matrix}$

Pass journal entry for issue of Debentures and prepare Discount on Issue of Debentures Account for 5 years.

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