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Question
Mention two differences between ‘Premium on Issue of Debentures’ and ‘Premium on Redemption of Debentures’.
Distinguish Between
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Solution
| Premium on Issue of Debentures | Premium on Redemption of Debentures | |
| 1. | It is a capital profit and is used in writing off capital losses. | It is a capital loss. |
| 2. | It is shown on the liabilities side under the head ‘Shareholders Funds and Sub-head Reserves and Surplus.’ | It is a liability and appears under the head “Non-Current Liabilities” under the sub-head Long-term Borrowings till the redemption of debentures. |
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