Write a note on 'Debentures issued at a discount. - Vidyadip

Question

Write a note on 'Debentures issued at a discount.

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Answer

When the debentures are issued at less than their face value, they are said to be have been issued at discount.

As per Companies Act, there is no restriction regarding maximum discount to be given on the issue of debentures. Amount of discount on debentures is debited to Discount on Debenture A/c.
Amount of debenture discount or loss on issue of debenture $18$ shown in the balance sheet as per Accounting Standard26.
Debenture discount amount is shown under different heads which depends on terms of debentures.

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