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Malhotra Jewellery Ltd. issued 30 Lakh, 9% Debentures of 3200 each at 194 on April 1, 2010 redeemable at premium of 5% as follows: 12 Lakh Debentures on March 31, 2015 6 Lakh Debentures on March 31, 2016 Balance Debentures on March 31, 2017 Compute the amount of discount/loss on issue of debentures to be written off each prepare the loss on issue of debentures account. and show year and also?
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Malhotra Jewellery Ltd. issued 30 Lakh, 9% Debentures of 3200 each at ...
Issue of Debentures at a Premium
Introduction:
When a company issues debentures at a price higher than their face value, it is known as the issue of debentures at a premium. The premium is the amount charged by the company over and above the face value of the debentures. In this case, Malhotra Jewellery Ltd. issued debentures at a premium of 5%.
Calculation of Amount Raised:
To calculate the amount raised by issuing debentures, we need to multiply the number of debentures by their face value. In this case, the face value of each debenture is Rs. 3200 and the company issued 30 lakh debentures.
Amount raised = Face value of debenture × Number of debentures
= Rs. 3200 × 30,00,000
= Rs. 9,60,00,00,000
Calculation of Premium:
The premium is charged as a percentage of the face value of the debentures. In this case, the premium is 5%. To calculate the premium, we need to multiply the face value of each debenture by the premium rate.
Premium per debenture = Face value of debenture × Premium rate
= Rs. 3200 × 5/100
= Rs. 160
Calculation of Total Premium:
To calculate the total premium, we need to multiply the premium per debenture by the number of debentures issued.
Total premium = Premium per debenture × Number of debentures
= Rs. 160 × 30,00,000
= Rs. 4,80,00,000
Writing off the Premium:
The premium on debentures is treated as a capital loss for the company. It is written off over the period for which the debentures are outstanding. In this case, the debentures are redeemable in three installments - 12 lakh debentures on March 31, 2015, 6 lakh debentures on March 31, 2016, and the balance debentures on March 31, 2017.
Calculation of Loss on Issue of Debentures:
To calculate the loss on issue of debentures, we need to divide the total premium by the number of years for which the debentures are outstanding.
Loss on issue of debentures = Total premium / Number of years
= Rs. 4,80,00,000 / 3
= Rs. 1,60,00,000
Preparation of Loss on Issue of Debentures Account:
The loss on issue of debentures account is prepared to record the writing off of the premium over the years. The account is debited with the loss on issue of debentures and credited with the amount of premium written off each year.
Year-wise Premium Written Off:
1. March 31, 2015:
- Debentures redeemed: 12 lakh
- Premium written off: Total premium / Number of years = Rs. 1,60,00,000 / 3 = Rs. 53,33,333.33
Introduction:
When a company issues debentures at a price higher than their face value, it is known as the issue of debentures at a premium. The premium is the amount charged by the company over and above the face value of the debentures. In this case, Malhotra Jewellery Ltd. issued debentures at a premium of 5%.
Calculation of Amount Raised:
To calculate the amount raised by issuing debentures, we need to multiply the number of debentures by their face value. In this case, the face value of each debenture is Rs. 3200 and the company issued 30 lakh debentures.
Amount raised = Face value of debenture × Number of debentures
= Rs. 3200 × 30,00,000
= Rs. 9,60,00,00,000
Calculation of Premium:
The premium is charged as a percentage of the face value of the debentures. In this case, the premium is 5%. To calculate the premium, we need to multiply the face value of each debenture by the premium rate.
Premium per debenture = Face value of debenture × Premium rate
= Rs. 3200 × 5/100
= Rs. 160
Calculation of Total Premium:
To calculate the total premium, we need to multiply the premium per debenture by the number of debentures issued.
Total premium = Premium per debenture × Number of debentures
= Rs. 160 × 30,00,000
= Rs. 4,80,00,000
Writing off the Premium:
The premium on debentures is treated as a capital loss for the company. It is written off over the period for which the debentures are outstanding. In this case, the debentures are redeemable in three installments - 12 lakh debentures on March 31, 2015, 6 lakh debentures on March 31, 2016, and the balance debentures on March 31, 2017.
Calculation of Loss on Issue of Debentures:
To calculate the loss on issue of debentures, we need to divide the total premium by the number of years for which the debentures are outstanding.
Loss on issue of debentures = Total premium / Number of years
= Rs. 4,80,00,000 / 3
= Rs. 1,60,00,000
Preparation of Loss on Issue of Debentures Account:
The loss on issue of debentures account is prepared to record the writing off of the premium over the years. The account is debited with the loss on issue of debentures and credited with the amount of premium written off each year.
Year-wise Premium Written Off:
1. March 31, 2015:
- Debentures redeemed: 12 lakh
- Premium written off: Total premium / Number of years = Rs. 1,60,00,000 / 3 = Rs. 53,33,333.33
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Malhotra Jewellery Ltd. issued 30 Lakh, 9% Debentures of 3200 each at 194 on April 1, 2010 redeemable at premium of 5% as follows: 12 Lakh Debentures on March 31, 2015 6 Lakh Debentures on March 31, 2016 Balance Debentures on March 31, 2017 Compute the amount of discount/loss on issue of debentures to be written off each prepare the loss on issue of debentures account. and show year and also?
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Malhotra Jewellery Ltd. issued 30 Lakh, 9% Debentures of 3200 each at 194 on April 1, 2010 redeemable at premium of 5% as follows: 12 Lakh Debentures on March 31, 2015 6 Lakh Debentures on March 31, 2016 Balance Debentures on March 31, 2017 Compute the amount of discount/loss on issue of debentures to be written off each prepare the loss on issue of debentures account. and show year and also? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Malhotra Jewellery Ltd. issued 30 Lakh, 9% Debentures of 3200 each at 194 on April 1, 2010 redeemable at premium of 5% as follows: 12 Lakh Debentures on March 31, 2015 6 Lakh Debentures on March 31, 2016 Balance Debentures on March 31, 2017 Compute the amount of discount/loss on issue of debentures to be written off each prepare the loss on issue of debentures account. and show year and also? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Malhotra Jewellery Ltd. issued 30 Lakh, 9% Debentures of 3200 each at 194 on April 1, 2010 redeemable at premium of 5% as follows: 12 Lakh Debentures on March 31, 2015 6 Lakh Debentures on March 31, 2016 Balance Debentures on March 31, 2017 Compute the amount of discount/loss on issue of debentures to be written off each prepare the loss on issue of debentures account. and show year and also?.
Malhotra Jewellery Ltd. issued 30 Lakh, 9% Debentures of 3200 each at 194 on April 1, 2010 redeemable at premium of 5% as follows: 12 Lakh Debentures on March 31, 2015 6 Lakh Debentures on March 31, 2016 Balance Debentures on March 31, 2017 Compute the amount of discount/loss on issue of debentures to be written off each prepare the loss on issue of debentures account. and show year and also? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Malhotra Jewellery Ltd. issued 30 Lakh, 9% Debentures of 3200 each at 194 on April 1, 2010 redeemable at premium of 5% as follows: 12 Lakh Debentures on March 31, 2015 6 Lakh Debentures on March 31, 2016 Balance Debentures on March 31, 2017 Compute the amount of discount/loss on issue of debentures to be written off each prepare the loss on issue of debentures account. and show year and also? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Malhotra Jewellery Ltd. issued 30 Lakh, 9% Debentures of 3200 each at 194 on April 1, 2010 redeemable at premium of 5% as follows: 12 Lakh Debentures on March 31, 2015 6 Lakh Debentures on March 31, 2016 Balance Debentures on March 31, 2017 Compute the amount of discount/loss on issue of debentures to be written off each prepare the loss on issue of debentures account. and show year and also?.
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Malhotra Jewellery Ltd. issued 30 Lakh, 9% Debentures of 3200 each at 194 on April 1, 2010 redeemable at premium of 5% as follows: 12 Lakh Debentures on March 31, 2015 6 Lakh Debentures on March 31, 2016 Balance Debentures on March 31, 2017 Compute the amount of discount/loss on issue of debentures to be written off each prepare the loss on issue of debentures account. and show year and also?, a detailed solution for Malhotra Jewellery Ltd. issued 30 Lakh, 9% Debentures of 3200 each at 194 on April 1, 2010 redeemable at premium of 5% as follows: 12 Lakh Debentures on March 31, 2015 6 Lakh Debentures on March 31, 2016 Balance Debentures on March 31, 2017 Compute the amount of discount/loss on issue of debentures to be written off each prepare the loss on issue of debentures account. and show year and also? has been provided alongside types of Malhotra Jewellery Ltd. issued 30 Lakh, 9% Debentures of 3200 each at 194 on April 1, 2010 redeemable at premium of 5% as follows: 12 Lakh Debentures on March 31, 2015 6 Lakh Debentures on March 31, 2016 Balance Debentures on March 31, 2017 Compute the amount of discount/loss on issue of debentures to be written off each prepare the loss on issue of debentures account. and show year and also? theory, EduRev gives you an
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