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

Assessment: JAMB UTME - Principles of Accounts - 2020 Subject: Financial Accounting

Question 1 Report

The debenture issued at par above the nominal value is said to be issued at a
Answer Details
A debenture that is issued at par above the nominal value is said to be issued at a premium. This means that the price at which the debenture is issued is higher than its face value or nominal value. For example, if a debenture has a nominal value of $100 and is issued at $105, it is said to be issued at a premium of $5. This is because the investor is willing to pay more for the debenture in order to receive a higher rate of return. Simply put, a premium means that the price paid for the debenture is higher than its face value.
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