Why is premium on the issue of debentures considered a capital profit? Post category:Accountancy Reading time:1 mins read SOLUTION It is considered as a capital profit because it is not an income arising from the normal course of business operations. Please Share This Share this content Opens in a new window X Opens in a new window Facebook Opens in a new window Pinterest Opens in a new window LinkedIn Opens in a new window Viber Opens in a new window VK Opens in a new window Reddit Opens in a new window Tumblr Opens in a new window Viadeo Opens in a new window WhatsApp Read more articles Previous PostMention two differences between ‘Premium on Issue of Debentures’ and ‘Premium on Redemption of Debentures’. Next Post‘Interest paid on debentures is a charge against the profits of the company’. Is this statement correct? Give reason in support of your answer. (C.B.S.E. 2020, Kolkata, Lucknow) You Might Also Like From the following Balance Sheet of Global Ltd., you are required to calculate Return on Investment for the year 2018-19: August 17, 2022 Simran and Reema are partners sharing profits in the ratio of 3: 2. Their capitals as on 31st March, 2018 were Rs. 2,00,000 each whereas Current Accounts had balances of Rs. 50,000 and Rs. 25,000 respectively interest is to be allowed @ 5% p.a. on balances in Capital Accounts. The firm earned net profit of Rs. 3,00,000 for the year ended 31st March, 2019. Pass the Journal entries for interest on capital and distribution of profit. Also prepare Profit and Loss Appropriation Account for the year. July 21, 2022 On 1-10-2018, Micro Ltd. issued 20,000, 8% debentures of Rs. 100 each and paid interest of Rs. 80,000 on these debentures on 31st March, 2019. Calculate the cash flow from financing activities for the period ending 31st March, 2019. (C.B.S.E. 2020, Mumbai, Chennai) October 6, 2022 Leave a Reply Cancel replyYou must be logged in to post a comment.
From the following Balance Sheet of Global Ltd., you are required to calculate Return on Investment for the year 2018-19: August 17, 2022
Simran and Reema are partners sharing profits in the ratio of 3: 2. Their capitals as on 31st March, 2018 were Rs. 2,00,000 each whereas Current Accounts had balances of Rs. 50,000 and Rs. 25,000 respectively interest is to be allowed @ 5% p.a. on balances in Capital Accounts. The firm earned net profit of Rs. 3,00,000 for the year ended 31st March, 2019. Pass the Journal entries for interest on capital and distribution of profit. Also prepare Profit and Loss Appropriation Account for the year. July 21, 2022
On 1-10-2018, Micro Ltd. issued 20,000, 8% debentures of Rs. 100 each and paid interest of Rs. 80,000 on these debentures on 31st March, 2019. Calculate the cash flow from financing activities for the period ending 31st March, 2019. (C.B.S.E. 2020, Mumbai, Chennai) October 6, 2022