The debenture issued at par above the nominal value is said to be issued at a

Assessment: JAMB UTME - Principles of Accounts - 2013 Subject: Financial Accounting

Question 1 Report

The debenture issued at par above the nominal value is said to be issued at a
Answer Details
When a debenture is issued at a value above its nominal value, it means that the company is receiving more money for each debenture than its face value. In this case, the debenture is said to be issued at a premium. A premium is an amount by which the price of a security, such as a bond or stock, exceeds its face value. This means that the company is effectively selling the debenture for more than it is worth, which can be seen as a sign of investor confidence in the company's future prospects. In summary, a debenture issued at a value above its nominal value is said to be issued at a premium.
Read lesson note on Provisions And Reserves (WAEC)
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