Select most appropriate alternative from those given below :

The issue of debentures less than the face value is called ___________.
a) at par
b) at premium
c) at discount
d) none of these

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Solution

The issue of debentures less than the face value is called at discount.

Explanation: When debentures are issued at a price below their face value, it is known as ‘issue of debentures at discount’. Such discount is debited to Discount on Issue of Debentures Account.

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Similar questions

Q. Select most appropriate alternative from those given below :

The issue of debentures more than face value is called___________.
a) at par
b) at discount
c) at premium
d) none of these

Q. Select most appropriate alternative from those given below :

The issue of debenture at its face value is called the issue ___________.
a) at par
b) at discount
c) at premium
d) none of these

Pass journal entries in the following cases:
(a) A Co.Ltd. issued ₹40,000; 12% Debentures at a premium of 5% redeemable at par.
(b) A Co.Ltd. issued ₹40,000; 12% Debentures at a discount of 10% redeemable at par.
(c) A Co.Ltd. issued ₹40,000; 12% Debentures at par redeemable at 10% premium.
(d) A Co.Ltd. issued ₹40,000; 12% Debentures at a discount of 5% and redeemable at 5% premium.
(e) A Co.Ltd. issued ₹40,000; 12% Debentures at a premium of 10% redeemable at 110%.

Q. Select the most appropriate answer from the alternatives given below and rewrite the sentence :

If shares are issued at its face value, it is called as issue at __________________.
a) premium
b) discount
c) par
d) none of these

KTR Ltd, issued 365, 9% Debentures of Rs 1,000 each on 4-3-2016.

Pass necessary Journal entries for the issue of debentures in the following situations:

(a) When debentures were issued at par redeemable at a premium of 10%.

(b) When debentures were issued at 6% discount redeemable at 5% premium.

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Select most appropriate alternative from those given below : The issue of debentures less than the face value is called ___________. a) at par b) at premium c) at discount d) none of these

The issue of debentures less than the face value is called at discount. Explanation: When debentures are issued at a price below their face value, it is known as ‘issue of debentures at discount’. Such discount is debited to Discount on Issue of Debentures Account.

Select most appropriate alternative from those given below :

The issue of debentures less than the face value is called ___________.
a) at par
b) at premium
c) at discount
d) none of these

The issue of debentures less than the face value is called at discount.

Explanation: When debentures are issued at a price below their face value, it is known as ‘issue of debentures at discount’. Such discount is debited to Discount on Issue of Debentures Account.