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 = ₹ 100
Let total face value = X
Assume a ₹ 100 debenture is issued at a 5% discount, i.e., for ₹ 95
Therefore, ₹ 1,00,000 represents the discount given on the issue, which is 5% of the total issue value
\[ \text{Total Face Value} = \frac{\text{Discount}}{\text{Rate of Discount}} = \frac{100000}{5\%} = \text{₹ } 20,00,000 \] Since ₹ 1,00,000 was the discount, the actual amount credited to Debentures Account is ₹ 20,00,000 - ₹ 1,00,000 = ₹ 19,00,000 Final Answer: ₹ 19,00,000