On 1st July, 2017 a company issued 50,000, 9% debentures of ₹100 each at a discount of 10%. The debentures were redeemable by five annual drawings of ₹10,00,000 on 31st March each year. Calculate the amount of discount o

CS Executive · Company Accounts & Auditing Practices · PYQS · June 2018
On 1st July, 2017 a company issued 50,000, 9% debentures of ₹100 each at a discount of 10%. The debentures were redeemable by five annual drawings of ₹10,00,000 on 31st March each year. Calculate the amount of discount on debentures to be written off at the end of the each year on 31st March.

Answer & Explanation:

Answer 2A(ii) Year ended Outstanding Amount (₹) Month for which amount remained outstanding Product of Amount (₹ in Lakhs) 31.03.2018 50,00,000 9 (01.07.2017 - 31.03.2018) 450 31.03.2019 50,00,000 3 (01.04.2018 - 30.06.2018) 150 40,00,000 9 (01.07.2018 - 31.03.2019) 360 31.03.2020 40,00,000 3 (01.04.2019 - 30.06.2019) 120 30,00,000 9 (01.07.2019 - 31.03.2020) 270 31.03.2021 30,00,000 3 (01.04.2020 - 30.06.2020) 90 20,00,000 9 (01.07.2020 - 31.03.2021) 180 31.03.2022 20,00,000 3 (01.04.2021 - 30.06.2021) 60 10,00,000 9 (01.07.2021 - 31.03.2022) 90 31.03.2023 10,00,000 3 (01.04.2022 - 30.06.2022) 30 Total 1800 The amount of discount ₹5,00,000 (10% of ₹50,00,000) to be written off in various years would be: Year Ratio * Discount Amount to be written off 2017-18 450/1800 * 500000 125000 2018-19 (150+360)/1800 * 500000 141667 2019-20 (120+270)/1800 * 500000 108333 2020-21 (90+180)/1800 * 500000 75000 2021-22 (60+90)/1800 * 50000 41667 2022-23 30/1800 * 500000 8333 Total 500000

Topics: Company Accounts

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