Class 12 Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Issue and Redemption of Debentures NCERT Solutions | What is discount on issue of debentures?

Welcome to the NCERT Solutions for Class 12th Accountancy - Company Accounts and Analysis of Financial Statements - Chapter Issue and Redemption of Debentures. This page offers a step-by-step solution to the specific question from Exercise 1, Question 10: what is discount on issue of debentures....
Question 10

What is discount on issue of debentures?

Answer

Discount on issue of debentures is a capital loss and over a period of 3 to 5 years or is charged to “Securities Premium Account” as per the guidelines issued by ICAI. The discount on issue of debentures can be written-off either by debiting it to profit and loss or to securities premium account.

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