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On May 01, 2025, Kaur Ltd. issued 10,000, 8% debentures of Rs. 100 each at a discount of 10% redeemable at a premium of 10%. The issue was fully subscribed and the amount was duly received. Calculate the amount of loss on issue of debentures.

Solution

✅ Correct Option: 2

Loss on issue covers both the discount allowed and the premium payable on redemption. Discount =10,000×100×10%=1,00,000= 10,000 \times 100 \times 10\% = 1,00,000 and premium on redemption =10,000×100×10%=1,00,000= 10,000 \times 100 \times 10\% = 1,00,000. Total loss =2,00,000= 2,00,000.

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