Question

Shivalik Ltd. issued 7% debentures of \u20b9 100 each at a discount of 5% on 1st April, 2023. Discount on issue of debentures, \u20b9 1,00,000 was completely written off through Statement of Profit and Loss on 31st March, 2024. On issue of debentures, \u2018Debentures Account\u2019 was credited with ____________________________.

• A. 10,00,000
• B. 20,00,000
• C. 19,00,000
• D. 1,00,000

Hint:

Always subtract the discount from the total face value to calculate the amount credited to Debentures Account.

Answer 1

The Correct Option is C

Number of debentures issued = Face value per debenture = \u20b9 100
Let total face value = X
Let\'s assume \u20b9 100 debenture issued at 5% discount i.e. for \u20b9 95
Therefore, \u20b9 1,00,000 is the discount given on issue = 5% of total issue value
\[ \text{Total Face Value} = \frac{\text{Discount}}{\text{Rate of Discount}} = \frac{100000}{5%} = \u20b9 20,00,000 \] Now, \u20b9 1,00,000 was discount, so actual amount credited to Debentures Account = \u20b9 20,00,000 - \u20b9 1,00,000 = \u20b9 19,00,000 Final Answer: \u20b9 19,00,000