Question

On 1st May, 2016, Goodluck Ltd. issued 16,000, 9% Debentures of ₹ 100 each at a discount of 10% redeemable at a premium of 10% redeemable after five years. All the debentures were subscribed and allotment was made . Discount on issue of Debentures is to be written off over the life of the debentures.
Prepare the Balance Sheet (extract) as at 31st March, 2017 showing Discount on issue of Debentures.

Answer 1

Balance Sheet as at March 31, 2017
Particulars		Note No.	Amount (Rs)
II Assets
1. Non-Current Assets
a. Other Non-Current Assets		1	96,000
2. Current Assets
a. Other Current Assets		2	32,000
Total			1,28,000

NOTES TO ACCOUNTS
Note No.	Particulars					Amount (Rs)
1.	Other Non-Current Assets
	Loss on issue of Debentures			1,28,000
	Less: Shown as Other Current Assets			32,000		96,000
	(To the extent to be written off after 12 months from the date of Balance sheet )
2.	Other Current Assets
	Loss on issue of Debentures					32,000
	(To the extent to be written off within 12 months from the date of Balance sheet )