Question

Raja Ltd. issued 8,000, 10% Debentures of 100 each at 98 per debenture. 10% Debentures Account will be credited by:

• A. 9,80,000
• B. 10,00,000
• C. 7,84,000
• D. 8,00,000

Hint:

Debentures Account is always credited with the face value, regardless of whether the issue is at a discount or premium. Any difference is adjusted through a separate discount or premium account.

Answer 1

The Correct Option is D

Step 1: Number of debentures issued = 8,000
Step 2: Face value of each debenture = 100
Step 3: Issue price per debenture = 98 (i.e., issued at a discount of 2)
Step 4: Credit to 10% Debentures Account is always at face value, not at issue price.
\(\Rightarrow\) Amount credited = \( 8,000 \times 100 = 8,00,000 \)
Bank A/c Dr. & 7,84,000
Discount on Issue of Debentures A/c Dr. & 16,000
To 10% Debentures A/c & 8,00,000