Question:
Aarav Ltd. issued 10,000, 9% debentures of rupee 100 each at a premium of 5%, redeemable at a premium of 10%. Loss on issue of debentures account will be debited by:
Aarav Ltd. issued 10,000, 9% debentures of rupee 100 each at a premium of 5%, redeemable at a premium of 10%. Loss on issue of debentures account will be debited by:
Show Hint
Premium on redemption increases the cost of borrowing and is charged to the Loss on Issue of Debentures account, while premium on issue provides capital gain.
Updated On: Jan 13, 2026
- rupee 10,000
- rupee 1,00,000
- rupee 1,50,000
- rupee 1,05,000
Hide Solution
Verified By Collegedunia
The Correct Option is B
Solution and Explanation
The loss on issue of debentures arises due to the premium on redemption, which is charged to the Loss on Issue of Debentures account. \[ \text{Loss on Issue of Debentures} =\text {Premium on Redemption} - \text{Premium on Issue} \] \[ = (10,000 \times 10) - (10,000 \times 5) \] \[ = 1,00,000 - 0 \] \[ = rupee 1,00,000 \]
Thus, the Loss on Issue of Debentures account will be debited by rupee1,00,000.
Was this answer helpful?
0
0
Top Questions on Debentures
- Ajanta Ltd. purchased machinery worth Rs 36,00,000 from Sujata Ltd. Ajanta Ltd. paid half the amount to Sujata Ltd. through a bank draft and the balance by issuing 8 debentures of Rs 100 each at a discount of 10.
Pass the necessary journal entries in the books of Ajanta Ltd. for the above transactions. - If a company issues Rs. 1,00,000, 9% debentures of Rs. 100 each at a discount of 5% but redeemable at a premium of 5%, then what amount will be debited to Loss on Issue of Debentures Account?
- CUET (UG) - 2025
- Accountancy
- Debentures
- G.S. Rai company ltd. purchased assets of the book value of Rs. 98,000 from another firm. It was agreed that purchase consideration be paid by issuing 11% debentures of Rs. 100 each. Assume debentures have been issued at discount of 20%. Identify the number of debentures issued by the company to the vendor:
- CUET (UG) - 2025
- Accountancy
- Debentures
- Debenture Application & Allotment A/c ........ Dr. 95,000
Loss on Issue of Debentures A/c ................. Dr. 10,000
\hspace{0.5cm} To 9% Debenture A/c ...................................... 1,00,000
\hspace{0.5cm} To Premium on Redemption of Debentures A/c .... 5,000
On the basis of the above entry, determine the rate of discount at which Rs. 1,00,000, 9% debentures of Rs. 100 each were issued if they were to be redeemed at a premium of 5%.- CUET (UG) - 2025
- Accountancy
- Debentures
- VX Ltd. issued 30,000, 8% debentures of ₹ 100 each at a discount of 10% redeemable at a certain rate of premium. On issue of these debentures, ‘Loss on issue of debentures account’ was debited with ₹ 4,50,000. The amount of premium on redemption of debentures was___.
View More Questions
Questions Asked in CBSE CLASS XII exam
A ladder of fixed length \( h \) is to be placed along the wall such that it is free to move along the height of the wall.
Based upon the above information, answer the following questions:(iii) (b) If the foot of the ladder, whose length is 5 m, is being pulled towards the wall such that the rate of decrease of distance \( y \) is \( 2 \, \text{m/s} \), then at what rate is the height on the wall \( x \) increasing when the foot of the ladder is 3 m away from the wall?
- CBSE CLASS XII - 2025
- Application of derivatives
- A meeting will be held only if all three members A, B and C are present. The probability that member A does not turn up is 0.10, member B does not turn up is 0.20 and member C does not turn up is 0.05. The probability of the meeting being cancelled is:
- CBSE CLASS XII - 2025
- Probability
- Vishesh, Manik and Amit were partners in the ratio 5 : 4 : 1. Amit retired on 31st March, 2024. Vishesh and Manik decided to share Amit’s share in the ratio 2 : 3. What will be the new profit sharing ratio between Vishesh and Manik?
- CBSE CLASS XII - 2025
- Retirement and Death of a Partner
- The electric field in a region is given by \( \vec{E} = 40x \hat{i} \, \text{N/C}. \) Find the amount of work done in taking a unit positive charge from a point (0, 3m) to the point (5m, 0).
- CBSE CLASS XII - 2025
- Electrostatics
- Consider the Linear Programming Problem, where the objective function \[ Z = x + 4y \] needs to be minimized subject to the following constraints: \[ 2x + y \geq 1000, \] \[ x + 2y \geq 800, \] \[ x \geq 0, \quad y \geq 0. \] Draw a neat graph of the feasible region and find the minimum value of $Z$.
- CBSE CLASS XII - 2025
- Linear Programming Problem
View More Questions