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Esha Ltd issued 1,00,000 7% debentures of 100 each at a discount of 5%, redeemable after 5 years at a premium of 6%. Loss on issue of debentures is (a) * 10,00,000 (b) 6,00,000 (c) 11.00,000 (d) 4,00.000?
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Esha Ltd issued 1,00,000 7% debentures of 100 each at a discount of 5%...
Calculation of Loss on Issue of Debentures:

To calculate the loss on issue of debentures, we need to consider the discount given on the issue and the premium payable on redemption.

Given details:
- Number of debentures issued: 1,00,000
- Face value of each debenture: Rs. 100
- Discount on issue: 5%
- Redemption premium: 6%

Step 1: Calculate the total discount:

Discount on issue = Face value * Discount rate * Number of debentures
= Rs. 100 * 5% * 1,00,000
= Rs. 5,00,000

Step 2: Calculate the total premium:

Premium on redemption = Face value * Premium rate * Number of debentures
= Rs. 100 * 6% * 1,00,000
= Rs. 6,00,000

Step 3: Calculate the loss on issue of debentures:

Loss on issue of debentures = Total discount - Total premium
= Rs. 5,00,000 - Rs. 6,00,000
= Rs. -1,00,000

The loss on issue of debentures is Rs. -1,00,000.

Explanation:

The loss on issue of debentures occurs when the total discount given on the issue of debentures is higher than the total premium payable on redemption. In this case, the company has given a discount of Rs. 5,00,000 on the issue of debentures but will only receive a premium of Rs. 6,00,000 on redemption.

Since the premium payable is higher than the discount given, the company incurs a loss of Rs. 1,00,000 on the issue of debentures. The negative sign indicates a loss.
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Esha Ltd issued 1,00,000 7% debentures of 100 each at a discount of 5%...
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Esha Ltd issued 1,00,000 7% debentures of 100 each at a discount of 5%, redeemable after 5 years at a premium of 6%. Loss on issue of debentures is (a) * 10,00,000 (b) 6,00,000 (c) 11.00,000 (d) 4,00.000?
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Esha Ltd issued 1,00,000 7% debentures of 100 each at a discount of 5%, redeemable after 5 years at a premium of 6%. Loss on issue of debentures is (a) * 10,00,000 (b) 6,00,000 (c) 11.00,000 (d) 4,00.000? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Esha Ltd issued 1,00,000 7% debentures of 100 each at a discount of 5%, redeemable after 5 years at a premium of 6%. Loss on issue of debentures is (a) * 10,00,000 (b) 6,00,000 (c) 11.00,000 (d) 4,00.000? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Esha Ltd issued 1,00,000 7% debentures of 100 each at a discount of 5%, redeemable after 5 years at a premium of 6%. Loss on issue of debentures is (a) * 10,00,000 (b) 6,00,000 (c) 11.00,000 (d) 4,00.000?.
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