How these ratios come?

 

Dear Student


In the question, it must be given that Discount to be written off over 5 yearn in the ratio of debentures outstanding. 
Therefore Ratio of  Debentures outstanding over 5 years is calculated as Number of Debentures outstanding in each year as follows :
Ratio = Number of Debentures Outstanding in Year 1 : Number of Debentures Outstanding in Year 2 : Number of Debentures Outstanding in Year 3 : Number of Debentures Outstanding in Year 4 : Number of Debentures Outstanding in Year 5.

Ratio = 20,00,000 : 20,00,000 : 18,00,000 : 14,00,000 : 8,00,000 or 20 : 20 : 18 : 14 :8.


And Discount on issue of Debentures is Written off in the proportion of this ratio calculated above.


Hope this helps
Regards
 

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debentures o/s
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Debentures o/s are 2000000, 2000000, 1800000, 1400000, 800000
So ratio would be found according to this
Hence it will be 20:20:18:14:8 or 10:10:9:7:4
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