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Question
State whether the following statement is True (T) or False (F):
Debentures cannot be issued at a premium.
True or False
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Solution
This statement is false.
Explanation:
A company can easily issue debentures at a premium (an amount above their face value) if it has a high credit rating or a strong market reputation. The premium amount collected is a capital profit and must be credited to the Securities Premium Account.
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