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Issued at Premium and Redeemed at Premium

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Question

State to whether the following statements are True/False.

The issue of debenture more than face value is termed on issue of debentures at par.

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Solution

False

Explanation: Issue of debentures at a price more than their face value is known as ‘issue of debentures at a premium’. The amount of a premium so received is credited to the Securities Premium Account.

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The issue of debentures less than face value of debenture to termed as issue of debentures at discount.

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