List of top Accountancy Questions on Security Premium asked in CUET (UG)

Securities Premium Account can be used only for the following purposes: (A) To issue partly paid bonus shares to the extent not exceeding unissued share capital of the company;
(B) Buy back of own shares.
(C) To write-off the expenses of, or commission paid, or discount allowed on any securities of the company;
(D) To pay premium on the redemption of preference shares or debentures of the company.
Choose the correct answer from the options given below:
XYZ Ltd. has been operating in the field of FMCG products in South Indian market. However to expand its operation in northern part of India, it needs additional capital Rs 20,00,000 which is raised by issuing 10% Debenture of Rs 12,00,000 at a discount of 10% to be repayable after 6 years. The rest of the funds is raised by issuing 5% debenture of Rs 8,00,000 at 15% premium. These debentures are perpetual in nature. After six years of successful operation in northern India, company took a loan of Rs 5,00,000 from PNB against 5% debenture of Rs 8,00,000 of Rs 100 each as a collateral security. The company successfully ran its operation and managed to pay off its loan within two years.
If 5% debenture of Rs 8,00,000 of Rs 100 were issued at 15% premium. Amount is payable as Rs 25 on applications, Rs 50 on allotment and Rs 40 on 1st and final call. How much amount should be credited to "Security Premium Reserve A/c".