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Question -

What is meant by ‘Issue of debenture at discount and redeemable at premium?



Answer -

It may happen that due to challenging market conditions a company has to raise funds from market by issuing debenture below its par value and to attract investor interest has to offer redeemable value higher than its par value, this is termed as issue of debenture at discount and redeemable at premium. The difference that is generated due to such arrangement is treated as loss on issue of debenture.

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