Correct Answer: A debenture issue at discount can be redeemed at premium

Solution : Debentures are referred to as being issued at a discount and redeemable at a premium when they are issued below their par value (or face value) but are redeemed at a price higher than their par value. Loss on issue of debenture is considered as the difference between the issue price and redemption price.

Hence the correct answer is option 1.