— Kishore V, SME and ACW at Edumarz
- When a corporation needs to manage finances, it may issue debentures below par value in order to attract investors.
- When these debentures are redeemed at a price greater than par value, it is referred to as the issue of debenture at a discount and redeemable at a premium.
- The difference between the issue and redemption prices is recognised as a loss on the debenture issue and recorded as miscellaneous expenditure on the company’s assets side.