Practicing Success
What is the premium on the issue of debentures for the Company? |
Revenue Receipt Capital Receipt Profit All of these |
Capital Receipt |
A debenture is said to be issued at a premium when the price charged is more than its nominal value. For example, the issue of Rs. 100 debentures for Rs. 110, (Rs. 10 is being the premium). The amount of premium is credited to Securities Premium Reserve account and is shown on the liabilities side of the balance sheet under the head “Reserves and Surpluses”. |