SOLUTION
Distinction between ‘Premium on Issue’ and ‘Premium on Redemption’ of Debentures:
| Premium on Redemption of Debentures | Premium on Redemption of Debentures | |
| 1. | It is a capital profit. | It is a capital loss. |
| 2. | It is shown on the Equity and liabilities side under the head “Reserve and Surplus”. | It is Liability and appears under the head “Non-Current Liabilities” under sub-head “Other Long Term Liabilities” till the redemption of debenture. |