{"id":59460,"date":"2024-04-16T01:37:33","date_gmt":"2024-04-16T01:37:33","guid":{"rendered":"https:\/\/exam.pscnotes.com\/mcq\/?p=59460"},"modified":"2024-04-16T01:37:33","modified_gmt":"2024-04-16T01:37:33","slug":"a-company-issued-rs-100000-worth-of-7frac12-debentures-of-rs-100-each-at-a-discount-of-5-these-debentures-are-repayable-after-10-years-in-a-lum-sum-at-a-premium-of-5-the-amount-of-l","status":"publish","type":"post","link":"https:\/\/exam.pscnotes.com\/mcq\/a-company-issued-rs-100000-worth-of-7frac12-debentures-of-rs-100-each-at-a-discount-of-5-these-debentures-are-repayable-after-10-years-in-a-lum-sum-at-a-premium-of-5-the-amount-of-l\/","title":{"rendered":"A company issued Rs. 1,00,000 worth of $$7\\frac{1}{2}\\% $$ Debentures of Rs. 100 each at a discount of 5%. These debentures are repayable after 10 years in a lum-sum at a premium of 5%. The amount of loss on issue of debentures to be written-off each year will be"},"content":{"rendered":"

[amp_mcq option1=”Rs. 1,000″ option2=”Rs. 5,000″ option3=”Rs. 500″ option4=”Rs. 1,500″ correct=”option3″]<\/p>\n

The correct answer is C. Rs. 500.<\/p>\n

The amount of loss on issue of debentures is Rs. 5,000 (100,000 * 5%). This loss is to be written off over the 10-year period of the debentures. Therefore, the amount of loss to be written off each year is Rs. 500 (5,000 \/ 10).<\/p>\n

Option A is incorrect because it is the total loss on issue of debentures. Option B is incorrect because it is the total amount of the debentures. Option D is incorrect because it is the amount of the premium on redemption of debentures.<\/p>\n

The following is a step-by-step solution to the problem:<\/p>\n

    \n
  1. Calculate the face value of the debentures: 1,00,000<\/li>\n
  2. Calculate the discount on issue of debentures: 1,00,000 * 5% = 5,000<\/li>\n
  3. Calculate the amount of loss on issue of debentures: 5,000<\/li>\n
  4. Calculate the number of years to maturity of the debentures: 10<\/li>\n
  5. Calculate the amount of loss to be written off each year: 5,000 \/ 10 = 500<\/li>\n<\/ol>\n","protected":false},"excerpt":{"rendered":"

    [amp_mcq option1=”Rs. 1,000″ option2=”Rs. 5,000″ option3=”Rs. 500″ option4=”Rs. 1,500″ correct=”option3″]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[85],"tags":[],"class_list":["post-59460","post","type-post","status-publish","format-standard","hentry","category-accounting","no-featured-image-padding"],"yoast_head":"\nA company issued Rs. 1,00,000 worth of $$7\\frac{1}{2}\\% $$ Debentures of Rs. 100 each at a discount of 5%. These debentures are repayable after 10 years in a lum-sum at a premium of 5%. The amount of loss on issue of debentures to be written-off each year will be<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/exam.pscnotes.com\/mcq\/a-company-issued-rs-100000-worth-of-7frac12-debentures-of-rs-100-each-at-a-discount-of-5-these-debentures-are-repayable-after-10-years-in-a-lum-sum-at-a-premium-of-5-the-amount-of-l\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"A company issued Rs. 1,00,000 worth of $$7\\frac{1}{2}\\% $$ Debentures of Rs. 100 each at a discount of 5%. These debentures are repayable after 10 years in a lum-sum at a premium of 5%. 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