Practicing Success
Practicing Success
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| When debentures are issued at par but redeemable at premium, such loss is debited to which account? |
P and L A/c Loss on issue of debentures A/c Capital Loss Premium on Redemption of Debentures |
| Loss on issue of debentures A/c |
| When debentures are redeemable at a premium, a provision has to be made right at the time of the issue by debiting the amount to ‘Loss on Issue of Debentures A/c’. It may be noted that when debentures are issued at a discount and are redeemable at a premium, the amount of discount on issue is also debited to ‘Loss on Issue of Debentures’. It may be noted that when the debentures are issued at a discount and are redeemable at par, the amount debited to ‘Discount on Issue of Debentures A/c’ as usual. |
