Premium example sentences



Debentures can be redeemed either at par or at a premium.In case shares are issued at a premium, i.e. at an amount more than the nominal or par value of shares, the amount of premium is credited to a separate account called 'Securities Premium Account', the use of which is strictly regulated by law.Loss on issue of debenture account is a capital loss and it is to be written-off gradually against the profit and loss account or securities premium account.When the shares of a company are issued more than its nominal value (face value), the excess amount is called premium and the issue is said to have been made at a premium.It may be noted that when debentures are issued at a discount and are redeemable at a premium, the amount of discount issue is also debited to 'Loss on Issue of Debentures'.Section 78 of The Companies Act, 1956 also permits the utilisation of 'Securities Premium Account' and other capital profits for writing off the discount/loss on issue of debentures.Debentures can be redeemed either at par or at a premium.The new shares or debentures may be issued at par, at a discount or at a premium.Section 78 of The Companies Act, 1956 also permits the utilisation of 'Securities Premium Account' and other capital profits for writing off the discount/loss on issue of debentures.Debentures can be issued at par, at a premium or at a discount.It may be noted that when debentures are issued at a discount and are redeemable at a premium, the amount of discount issue is also debited to 'Loss on Issue of Debentures'.The important point to be noted in this context is that the share premium account is not to be debited at the time of forfeiture if the premium has been received in respect of the forefeited share.The amount of premium is credited to Securities Premium account and is shown on the liabilities side of the balance sheet under the head “Reserves and Surpluses”.The amount received as premium is credited to 'securities premium account' whereas amount of discount allowed is debited to “loss/discount on issue” and is written-off over the years.Premium on redemption is a liability of a company payable in future.

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