loss on issue of deb.

1. Loss on issue of DEBENTURES
If a company issues debentures at par or at a
discount which are redeemable at a premium, the
premium payable on redemption of the debentures
should also be treated as capital loss and as such it
should be dealt within the same manner as
‘Discount on Issue of Debentures’.
ENTRIES ARE :-
Profit and Loss A/c Dr.(with the amount written off)
To Loss on Issue of Debentures A/c

2. The loss to be incurred by a company for a
particular issue of debentures is ascertained in the
following manner:
(i) If the debentures are issued at par and
redeemable at a premium, the loss will be equal to
the amount
of premium payable on redemption.
(ii) if the debentures are issued at a discount and
redeemable at a premium, the loss will be equal to
the
total of the amount of discount on issue and the
amount of premium on redemption.