Question : Loss on issue of Debentures arises when
Option 1: Debentures are issued at par and redeemable at par
Option 2: Debentures are issued at a premium redeemable at par
Option 3: Debentures are issued at premium redeemable at premium
Option 4: All of the above
Correct Answer: Debentures are issued at premium redeemable at premium
Solution : Answer = Debentures are issued at a premium and redeemable at a premium
Loss on the issue of debentures occurs when debentures are issued at a premium and are redeemable at a premium. This means the debentures are sold for more than their face value and will be repaid at a higher value, resulting in a loss for the company upon redemption. Hence, the correct option is 3.
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
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 _____________.
Question : The Company will pay a premium at the time of their redemption. Although such premium will be paid at the time of actual redemption, as it is a known ------- the Company records such loss at the time of issue by -------- an account called, ------------------------.
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?
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