The following journal entry appears in the books of X Co. Ltd.:
$$\begin{array}{llcc}\text{Bank A/c}& \text{Dr.}& 4,75,000& \\ \text{Loss on issue of debenture A/c}& \text{Dr.}& 75,000& \\ \text{To }12\%\text{ Debentures A/c}& & & 5,00,000\\ \text{To Premium on Redemption of Debenture A/c}& & & 50,000\end{array}$$
Based on this entry, the debentures have been issued at a discount rate of:

Let's split the total Loss on Issue of Debentures ($\text{Rs. }75,000$) into its components.We know that:
$$\text{Total Loss on Issue}=\text{Discount on Issue}+\text{Premium on Redemption}$$
Given:$\text{Premium on Redemption}=\text{Rs. }50,000$$\text{Total Loss on Issue}=\text{Rs. }75,000$ Thus, we can find the discount on issue:
$$\text{Discount on Issue}=\text{Rs. }75,000-\text{Rs. }50,000=\text{Rs. }25,000$$
Alternatively, we can find it directly from the cash received:
$$\text{Discount on Issue}=\text{Nominal Value of Debentures}-\text{Bank Amount}$$
$$\text{Discount on Issue}=\text{Rs. }5,00,000-\text{Rs. }4,75,000=\text{Rs. }25,000$$
Now, let's calculate the discount percentage relative to the nominal (par) value of the debentures ($\text{Rs. }5,00,000$):
$$\text{Discount Percentage}=\left(\frac{\text{Discount on Issue}}{\text{Nominal Value}}\right)\times 100$$
$$\text{Discount Percentage}=\left(\frac{25,000}{5,00,000}\right)\times 100=5\%$$