HomeTestsSearchRankProfile
mediumMCQCUET Accountancy2026Accountancy
1 mark

To write off a Discount on the Issue of Debentures, which of the following journal entries is recorded?

  1. A
    Shareholder A/c Dr.To Discount on issue of Debentures A/c
  2. B
    Capital reserve A/c Dr.To Discount on issue of Debentures A/c
  3. C
    Securities Premium Reserve A/c / Statement of Profit and Loss Dr.To Discount on Issue of Debentures A/c.
  4. D
    Share forfeiture A/c Dr.To Discount on issue of Debentures A/c

Solution & Step-by-step Explanation

Capital losses or costs like a discount on debentures must be cleared out in the same year they occur. They are written off first by utilizing balances from the Securities Premium Reserve Account (if available), and the remainder is charged directly against the Statement of Profit and Loss.

Practice this question

Try it yourself before checking the explanation above.

To write off a Discount on the Issue of Debentures, which of the following journal entries is recorded?
A
Shareholder A/c Dr.To Discount on issue of Debentures A/c
B
Capital reserve A/c Dr.To Discount on issue of Debentures A/c
C
Securities Premium Reserve A/c / Statement of Profit and Loss Dr.To Discount on Issue of Debentures A/c.
D
Share forfeiture A/c Dr.To Discount on issue of Debentures A/c

Share This Question

Company AccountsDebentures

Related Questions

easyMCQ

Which one of the following statements is true?

easyMCQ

Which of the following statements is not correct?

easyMCQ

Which one of the following statements is correct?

easyMCQ

The product formed by the reaction of an aldehyde with a primary amine is:

easyMCQ

Which part of the tobacco plant is infected by Meloidogyne incognita?

easyMCQ

The term ecosystem was coined by:

Ready for a Full Test?

Practice with timed mock tests and track your performance across Accountancy.

Browse TestsLeaderboard

Discussion