On 1.4.2021 Deep Ltd issued ` 4,00,00,000, 8% debentures at a discount of 6%, redeemable at a premium of 10%. On 31.3.2022 the company decided to write off discount and loss on issue of debentures. On that date the Securities Premium Reserve Account had a credit balance of ` 1,40,000. The amount of profit utilised by the company for writing off the ‘discount and loss on issue of debentures’ will be :

Correct option is B

The amount of profit utilised by the company for writing off the ‘discount and loss on issue of debentures’ will be
₹62,60,000, which corresponds to option (b). 
Step 1: Calculate Total Discount and Loss on Issue of Debentures 
The total amount that needs to be written off includes both the discount on issue and the premium payable on redemption (which is treated as a loss at the time of issue). 
· Discount on Issue: 4,00,00,000×6%=$24,00,000
· Loss (Premium on Redemption): 4,00,00,000×10%=$40,00,000
· Total Amount to be Written Off: Total=$24,00,000+$40,00,000=$64,00,000
Step 2: Determine Amount Utilized from Profit 
According to accounting standards, the discount or loss on issue of debentures can first be written off against the Securities Premium Reserve, and any remaining balance is charged to the Statement of Profit and Loss (Revenue Profit). 
· Total Amount to be Written Off: $64,00,000
· Securities Premium Reserve (SPR) Balance Available: $1,40,000
 The amount utilized from the company's profit (Statement of Profit and Loss) is the balance remaining after using the SPR: 
· Amount charged to Profit and Loss A/c (Profit Utilised): $64,00,000−$1,40,000=$62,60,000