Based on following case, answer question.

A Ltd issued 2,000, 10% debenture of ₹100 each on April 1, 2019 at a discount of 10% redeemable at a premium of 10% after five years. Company purchased assets of the book value of ₹2,20,000 from B Ltd. at book value and agreed to make payment of purchase consideration by issuing another 2000, 10% Debentures of ₹100 each at a premium of 10% on above mentioned date only.

On 31st March 2020, Premium on Redemption of Debentures will be shown in the Balance Sheet under:

Other long-term liabilities

The correct answer is option 2- Other long-term liabilities.

Premium on redemption is a liability of a company payable in the future. It is a provision and is shown under the head Non-current liabilities under the sub-head ‘other long term liabilities’ until debentures are redeemed.