Question

Prepare 'Loss on Issue of Debentures Account' for the year ended 31st March, 2023.

Hint:

For part (b): Loss on issue of debentures is amortised over the tenure of the debentures. Any portion written off in the first year is adjusted against Securities Premium Account (if available), while the remaining amount is carried forward for future years.

Answer 1

(b): Loss on Issue of Debentures Account: \begin{center} \renewcommand{\arraystretch}{1.5} \begin{tabular}{|p{6cm}|r|p{6cm}|r|} \hline Particulars & Amount (₹) & Particulars & Amount (₹)
\hline To Premium on Redemption of Debentures A/c & 1,00,000 & By Securities Premium A/c & 1,00,000
To Balance c/d (to be amortised in future years) & 1,00,000 & &
\hline Total & 2,00,000 & Total & 2,00,000
\hline \end{tabular} \end{center} Explanation: 1. Debentures were issued with a ₹ 50 per debenture premium, generating ₹ 1,00,000 in Securities Premium. 2. Redemption includes a ₹ 50 per debenture premium, resulting in a ₹ 2,00,000 loss. 3. ₹ 1,00,000 of this loss is offset against Securities Premium Account, with the remaining ₹ 1,00,000 deferred for future amortisation.