Question : If debentures of Rs. 20,000 are issued at par and are redeemable at a premium of 10%, the premium payable is debited to
Option 1: Premium on Redemption of Debentures Account
Option 2: Debentures Suspense Account
Option 3: Loss on Issue of Debentures Account
Option 4: None of the above
Correct Answer: Premium on Redemption of Debentures Account
Solution : Answer = Premium on Redemption of Debentures Account.
If the debenture is redeemed at a premium at the time of the issue of the debenture, loss on the issue of the debenture account is debited by Rs 2000, and at the time of redemption of the debenture premium on the redemption of the debenture account, is debited by Rs 2,000. Hence, the correct option is 1.
Question : Loss on issue of Debentures arises when
Question : Home Products Ltd. issued on 1st April, 2019, 10,000, 9% Debentures of Rs. 100 each at a premium of 10% redeemable at a premium of 5% after 5 years. Issue price was payable along with application. Which of the following statements is correct?
Question : KTR Ltd., issued 365, 9% Debentures of Rs. 1,000 each on 4th March, 2016 at 6% discount, redeemable at 5% premium. Loss on issue of Debentures debited/credited with _____________.
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