Returns of cash sales will be recorded in cash book.

The amount of debenture discount can be written off in two ways :
1. All debentures are to be redeemed after a fixed period. When the debentures are to be redeemed after a fixed period, the amount of discount will be distributed equally within the number of years spreadedbetween the issue of debentures and their redemption. The amount of discount on issue of debentures to be written off each year is calculated as
Amount of discount to be written off annually
= Total amount of Discount/Number of years
2. Debentures are redeemed in instalments
Debentures may also be redeemed in instalments but over a fixed period. In that case the amount of debenture discount will be written off each year in proportion to the amount of debentures redeemed.

Premium on issue of debentures will be shown as Securities Premium under Reserve and Surplus.

Debentures issued as colletual security will be added in total of liabilities as well as assets.

Credit purchase of stationery worth Rs. 10,000 by a stationery dealer will be recorded in purchases book.

Under this method we calculate the average profits and then assess the capital needed for earning such average profits on the basis of normal rate of return, such capital is called capitalized value of average profits. After arriving at the capitalized average profit, Capital employed (assets – liabilities) of the firm is then subtracted from the capitalized value of average profits to arrive at the Goodwill,.
To calculate goodwill using average profit, the average net profit for a given number of past years are multiplied by an
agreed number of years.
Mathematically, Capitalized Value of Average Profits = Average Profits × (100 / Normal Rate of Return)
Goodwill = Capitalized Value of Average Profits – Capital Employed.
Here profit for the year = 20,000
Reasonable rate of return = 10%
Thus capitalized value of profit = 20,000 × 100/10 = 2,00,000
Capital employed = 1,50,000
Thus Goodwill = 2,00,000 – 1,50,000 = 50,000

When a new partner is admitted in the firm, the existing/old partners have to sacrifice, what is given to the new partner, from their future profits, the reputation they have gained in their past efforts and the side of capital they have taken before. The new partner when admitted, has to compensate for all these sacrifices made by the old ones. The compensation for such sacrifice can be termed as ‘goodwill’.
Hence, at the time of admission of the new partner, it is necessary to account the valuation of goodwill in the firm.
Here the share in profit is 1/5th
The total value of goodwill = 60,000
Thus C’s share of goodwill brought by him = 1/5 of 60,000 = Rs. 12,000

Interest on debentures is charge against profits not appropriation.