Question : Which of the following statements is incorrect?

Option 1: Premium on Issue of Debentures is a capital profit

Option 2: Premium on Issue of debentures are  shown on the Equity and Liabilities side under the head ‘Reserves and Surplus’

Option 3: It is a liability and appears under the head “Non-Current Liabilities” under sub-head ‘Other Long term Liabilities’ till the redemption
 

Option 4: All of the above 

Question : Which of the following statements is false?  

Option 1: Loss on Issue of Debentures is debited at the time of issue of debentures following the Prudence Concept of Accounting.

Option 2: Loss on Issue of Debentures is written off from Securities Premium Reserve, if it exists and thereafter from Statement of Profit and Loss.

Option 3: Loss on Issue of Debentures Account is an Expense Account and Premium on Redemption of Debentures Account is a Liability Account.

Option 4: Premium on Redemption of Debentures Account is credited at the time of payment, i.e., on redemption of debentures.

Question : Which of the following statements is false?  

Option 1: Loss on Issue of Debentures is debited at the time of issue of debentures following the Prudence Concept of Accounting.

Option 2: Loss on Issue of Debentures is written off from Securities Premium Reserve, if it exists and thereafter from Statement of Profit and Loss.

Option 3: Loss on Issue of Debentures Account is an Expense Account and Premium on Redemption of Debentures Account is a Liability Account.

Option 4: Premium on Redemption of Debentures Account is credited at the time of payment, i.e., on redemption of debentures.

Question : The Company will pay a premium at the time of their redemption. Although such premium will be paid at the time of actual redemption, as it is a known ------- the Company records such loss at the time of issue by -------- an account called, ------------------------.

Option 1: Profit, debiting, loss on issue of debentures 

Option 2: Loss, credited, loss on issue of debentures 

Option 3: Loss, debiting, loss on issue of debentures 

Option 4: Loss, debiting, premium on redemption of debentures

Question : If debentures of Rs. 20,000 are issued at par and are redeemable at a premium of 10%, the premium payable is debited to

Option 1: Premium on Redemption of Debentures Account

Option 2: Debentures Suspense Account

Option 3: Loss on Issue of Debentures Account

Option 4: None of the above