Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:
When debentures are issued less than face value, then it is said to be issued at.........
Options:
Premium
Discount
Par
Cannot be issued on less than the face value
Correct Answer:
Discount
Explanation:
When debentures are issued by the company at a price less than its nominal value (face value) it is said to be issued at discount. It is important to note that the Companies Act has not put any restriction on the maximum limit of discount.