Read the following information carefully and answer the question. A Limited took over assets of ₹3,00,000 and liabilities of ₹10,000 from X and Co. Ltd. for an agreed purchase consideration of ₹2,70,000 to be satisfied by the issue of 10% debentures of ₹100 each at a premium of 20%. The company also took a loan of ₹10,00,000 from Punjab National Bank and issued 10% debentures of ₹12,00,000 of ₹100 each as collateral security. The rate of interest on the loan is 12% per annum.
‘Discount on issue of debenture’, which is to be written off under one operating cycle is shown under:
Other Current Assets
Discount on issue of debentures is an expense and is shown as Other Current Assets in financial statements.
Important Questions from Accounting for Debentures
Balance of Debenture Redemption Reserve A/c after the redemption of debenture is credited to:
Calculate the number of Debentures issued by A Ltd. for consideration other than cash:
If the consideration for issue of Debentures is less than the amount of debentures issued, then the difference is:
When Debentures are issued at par and are redeemable at a premium, the Loss on such an issue is debited to:
The Debentures that are payable on the expiry of the specific period either in Lumpsum or in installments during life time of the company are called:
