Following Journal entry is passed in case of:

Debenture Application and Allotment A/ c Dr.
Loss on Issue of Debenture A/c Dr.
          To Premium on Redemption of Debentures A/c
          To Debentures A/c

When debenture are issued at discount and redeemed at Premium

The correct answer is Option (2) → When debenture are issued at discount and redeemed at Premium