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Question
State to whether the following statement is True/False.
The issue of debenture more than face value is termed on issue of debentures at par.
Options
True
False
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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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| Particulars | (₹) | Particulars | (₹) |
| Security deposit for electricity for ten years | 30,000 | Uncalled amount on partly paid-up shares | 8,00,000 |
| Underwriting commission | 20,000 | 10% Debentures | 5,00,000 |
| General Reserve | 70,000 | Statement of P/L (Dr.) | 10,000 |
| Fixed Deposits | 2,00,000 | Calls-in arrears @ ₹ 1 per share | 40,000 |
| Premium on redemption of Debentures | 20,000 | Securities Premium | 2,00,000 |
| Equity Share Capital (1,00,000 shares of ₹ 10 each) |
10,00,000 |
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