When debentures are issued at premium with the term of redeeming them at par. The amount of premium received at the time of issue will be:
When debentures are issued at premium with the term of redeeming them at par. The amount of premium received at the time of issue will be:
Solution
✅ Correct Option: 4
Premium received on issue of debentures is a capital receipt and is credited to Securities Premium Reserve A/c. Since debentures are redeemed at par, there is no premium on redemption. Hence, the issue premium goes to Securities Premium Reserve.
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