The correct answer is option 'D' - Miscellaneous expenditure.

Explanation:
When a company issues debentures, it incurs certain expenses related to the issuance process. These expenses are referred to as "loss on issue of debentures." It is important to note that this loss is not an asset or a liability but is treated as miscellaneous expenditure.

Here are the reasons why loss on issue of debentures is treated as miscellaneous expenditure:

1. Nature of the expenditure: The loss on issue of debentures is a one-time expenditure incurred by the company during the process of issuing debentures. It is not directly related to the company's operations or generating future benefits. As a result, it is classified as miscellaneous expenditure rather than an asset or liability.

2. Non-recurring nature: The loss on issue of debentures is not a regular or recurring expense. It is incurred only when the company issues debentures. Since it does not occur regularly, it is not classified as a current asset or liability.

3. Treatment as an expense: The loss on issue of debentures is treated as an expense in the company's financial statements. It is deducted from the company's profits to arrive at the net profit figure. This treatment is consistent with the classification of miscellaneous expenditure as an expense.

4. Not meeting the criteria for asset or liability: An asset is a resource controlled by the company that is expected to generate future economic benefits. A liability is an obligation of the company to transfer resources or provide services in the future. The loss on issue of debentures does not meet the criteria to be classified as either an asset or a liability.

In conclusion, the loss on issue of debentures is treated as miscellaneous expenditure because it is a one-time, non-recurring expense that does not meet the criteria to be classified as an asset or a liability.

Since it is a capital loss it can be in balance sheet misscalaneous expenditure