Face value of debenture
Paid-up value of debentures
Prepaid amount on debenture
Difference between fall value and paid-up value on debenture
Answer is Wrong!
Answer is Right!
The correct answer is: A. Face value of debenture
When a company buys its own debenture as an investment, the debenture account is debited with the face value of the debenture. The face value is the amount that the company borrowed from the debenture holders. The company will then have to pay back the face value of the debenture, plus interest, to the debenture holders.
The other options are incorrect because:
- Option B, paid-up value of debentures, is the amount that the debenture holders have paid to the company. This is not the amount that the company owes to the debenture holders.
- Option C, prepaid amount on debenture, is the amount that the company has paid to the debenture holders in advance. This is not the amount that the company owes to the debenture holders.
- Option D, difference between face value and paid-up value on debenture, is not a relevant amount.