Question : Interest on debenture is paid on :
Option 1: Amount Received on issue
Option 2: On Premium
Option 3: On Nominal (Face value)
Option 4: None of the above
Correct Answer: On Nominal (Face value)
Solution : Debentures typically have a predetermined rate of interest that is routinely applied to their face value. It should be highlighted that regardless of the company's revenue position, this interest must be paid to the holders as a charge against the company's profit.
Hence the correct answer is option 3.