Interest on debentures is calculated on ___
None of these
Face value of debentures
Market value of debentures
Purchase value of debentures
Interest on debentures is calculated on face value of debentures.
A company issued debentures of the face value of Rs 10,00,000 at a discount of 6% on 1st April, 2012. These debentures are redeemable by annual drawings of Rs 2,00,000 made on 31st March each year. The directors decided to write off discount based on the debentures outstanding each year. Prepare Discount on Issue of Debentures account for five years.
A Ltd purchased its own debentures of the face value of Rs 2,00,000 from the open market for immediate cancellation at Rs 92. Pass the journal entries.