A company issues $\text{Rs. }1,00,000$, $9\%$ debentures of $\text{Rs. }100$ each at a discount of $15\%$, but redeemable at a premium of $5\%$. The total amount debited to the 'Loss on Issue of Debentures Account' is:

Let's calculate the components of the loss:Nominal Value of Debentures = $\text{Rs. }1,00,000$ Discount on Issue = $15\%\text{ of }1,00,000=\text{Rs. }15,000$ Premium on Redemption = $5\%\text{ of }1,00,000=\text{Rs. }5,000$ Both the discount offered during issuance and the premium payable upon redemption represent financial losses for the firm. They can be combined and debited to the 'Loss on Issue of Debentures Account':
$$\text{Total Loss on Issue}=\text{Discount on Issue}+\text{Premium on Redemption}$$
$$\text{Total Loss on Issue}=15,000+5,000=\text{Rs. }20,000$$