On which value Interest on debentures is paid by a company?

Face value

The correct answer is option 3- Face value.

The face value of debentures is the nominal value or principal amount that each debenture represents. It serves as the basis for calculating interest payment. When a company issues debentures, it is under an obligation to pay interest thereon at fixed percentage (half yearly) periodically until debentures are repaid. This percentage is usually as part of the name of debentures like 8% debentures, 10% debentures, etc., and interest payable is calculated at the nominal value of debentures. Interest on debenture is a charge against the profit of the company and must be paid whether the company has earned any profit or not.