— Kishore V, SME and ACW at Edumarz
- When debentures are redeemed at a price higher than their face value or par value, the debentures are said to be redeemed at a premium.
The difference between the redeemed price and the par value is considered a capital loss, which is written off until the debentures are redeemed.
Until the debentures are redeemed, the premium on redemption is recorded on the liabilities side of the balance sheet under the heading “current liabilities and provisions.”