Question

Why is premium on redemption of debentures is personal account?

Answer 1

Premium on Redemption of Debentures is

 personal account

 and it is a liability of the company which is payable on redemption.

Answer 2

Premium on redemption of debentures is a liability so it is a personal account.

Explanation:

Debentures are a short or medium type debt instrument that helps in increasing funds. This tool is mostly used by huge companies so that they can raise large amounts of money but at a fixed interest rate.

Any liability is a personal account.

Here, in our case it's premium on redemption of debentures, which is a liability to the company as the company should pay back. According to the modern rules of accounting, any liability is a personal account, therefore causing premium on redemption to also be a personal account.

Learn more on premium on redemption of debentures

What is meant by 'Premium on Redemption of debentures'?

https://brainly.in/question/7038806

Difference between premium on issue of debentures and premium on redemption of debentures.

https://brainly.in/question/2156676