Practicing Success
Practicing Success
CUET Preparation Today
| When debentures are issued at discount but redeemable at premium which of the account is credited at the time of issue and by what amount? |
Debentures a/c (Amount of issue) Premium on redemption A/c (Amount of premium on Redemption) Loss on Issue of Debentures A/c (Difference of issue and redemption Price) None of the above |
| Premium on redemption A/c (Amount of premium on Redemption) |
| Loss on Issue of Debentures A/c will be debited at the time of issue. The following journal entry will be made: Debenture Application & Allotment A/c Dr. Loss on Issue of Debentures A/c Dr. (with discount on issue plus premium on redemption) To Debentures A/c (with nominal value of debenture) To Premium on Redemption (with premium on redemption) of Debentures A/c (Allotment of debentures at a discount and redeemable at premium) |
