Question

Pilot Pens Ltd. Issued 5,000, 6% Debentures of ₹ 100 each at a discount of 20%. It had balance in Securities Premium Reserve of ₹ 60,000. It decided to write off the discount from Securites Premium Reserve .
Show the Notes to Accounts writing off the Discount on Issue of Debentures .

Answer 1

Notes to Accounts
` Note Balance amount of Discount on Issue of Debentures (₹ 40, 000) is writen off from statement of profit and Loss. Hence , the balance in Surplus, i.e., Balance in Statement of Profit and Loss shows negative balance if ₹ 40, 000.