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.
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:
CUET UG 2022 — Accountancy Company Accounts
2022mcqmedium
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:
Official previous-year question
Held on 30 Aug 2022 · Verified 13 Jul 2026.
Options
- A
Debited to premium on Redemption of Debenture A/C
- B
Credited to Premium on Redemption of Debentures A/C
- C
Debited to Securities Premium Reserve A/C
- D
Credited to securities premium Reserve A/C
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