Discount on debentures
Options
A
B
C
D
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Company AccountsQ-2 | Introduction to Company AccountsQuestion 4897 of 112
All Questions Correct Answer
✅ Option — Correct Option
All Options:
- A
- B
- C
- D
Detailed Solution & Explanation
Discount on debentures:
The discount is a capital loss and it should be written off as early as possible.
Even whole amount can be written off in the year of issue itself against share
premium or any other capital profit.
Otherwise Debenture Discount can be written off over the lifetime of debentures as
follows (applying matching principle):
- If the Debentures are redeemable at the end of a period, then the Discount will be
written off equally over that period.
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