If debenture valuing Rs. 3,25,000 were issued against net assets of Rs. 3,50,000 the balance of Rs. 25,000 would be credited to-

The correct answer is: A. Capital reserve account.

A capital reserve is a reserve that is created when a company issues shares or debentures at a premium. The premium is the difference between the issue price of the shares or debentures and their face value. The capital reserve is used to strengthen the company’s financial position and can be used to pay dividends, purchase assets, or write off losses.

In this case, the company has issued debentures at a premium of Rs. 25,000. This amount will be credited to the capital reserve account. The capital reserve account will then be used to strengthen the company’s financial position.

The other options are incorrect because:

• General reserve is a reserve that is created from the profits of the company. It is used to meet unexpected expenses or to strengthen the company’s financial position.
• Profit and loss account is a statement that shows the income and expenses of a company for a particular period of time. The profit or loss for the period is transferred to the balance sheet.
• Goodwill account is an account that is used to record the excess of the purchase price of an asset over its fair value. Goodwill is not a tangible asset and cannot be depreciated.