Question

Discount on issue of debentures is recorded in the form of:

• A. Intangible Asset
• B. Current Asset
• C. Current Liabilities
• D. Miscellaneous Expenditure

Hint:

Discount on issue of debentures = Capital loss → shown as fictitious asset till written off.

Answer 1

The Correct Option is D

Step 1: Nature of discount.
Discount = capital loss to the company, as debentures are issued below face value.
Step 2: Accounting treatment.
Discount on issue of debentures is not written off immediately; it is shown as a fictitious asset (deferred expenditure) under “Miscellaneous Expenditure” until amortised.
Step 3: Conclude.
Hence, it is shown as Miscellaneous Expenditure in the Balance Sheet.
Final Answer: \[ \boxed{\text{Miscellaneous Expenditure}} \]