Question

Debenture premium cannot be used to ______.

Options

• write off the discount on the issue of shares or debentures

• write off the premium on redemption of shares or debentures

• pay dividends

• write off capital loss

Answer 1

Debenture premium cannot be used to pay dividends.

Explanation:

The premium on debentures cannot be utilised to pay dividends. It can be used to write off premiums permitted on share or debenture redemptions, preliminary expenses, expenses or the commission paid or discount allowed on any share or debenture issue, and so on.