Difference between premium on Issue of Debentures and Premium on Redemption of Debentures (Class 12)

Share your love

Looking for the difference between premium on issue of debentures and premium on redemption of debentures as per the syllabus of class 12 CBSE, ISC, and state Board.

This topic is concerned with accounting for debentures (issue of debentures) chatper of accountancy class 12.

I have explained this topic in detail.

Distinction between premium on Issue of Debentures and Premium on Redemption of Debentures (Class 12)

Following are the differences

BasisPremium on Issue of DebenturesPremium on Redemption of Debentures
Capital Profit/LossIt is a capital profit and is used for the purposes specified in Section 52(2) of the companies Act, 2013It is a capital loss
NatureIt is a reserveIt is a liability
Outflow of CashIt does not involve outflow of cashIt is paid when the debentures are redeemed
How shown in Balance SheetThe Balance is shown in the Equity and Liabilities part of the Balance Sheet under main head Shareholders funds and sub-head reserves and surplusIt is shown in the Equity and Liabilities part of the Balance Sheet under the main head ‘Non-Current Liabilities, and sub-head ‘Other Long-term Liabilities’.
Share your love
Default image
Anurag Pathak
Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his youtube channel and can download the Android & ios app for free lectures.
Articles: 954

Leave a Reply

close

Ad Blocker Detected!

Our Website is made possible by displaying online advertisements to our visitors. Please consider supporting us and remove the AD - Blocker to read this article.

Refresh

error: Content is protected !!