Q.Premium on issue of Debenture is
(A) an asset
(B) an income
(C) an expense
(D) a liability.

Premium on issue of debentures is a liability (shown under Reserves and Surplus) — option (D).

When debentures are issued at a price above their face value, the excess is the premium on issue. This premium is a capital receipt, not a revenue income, so it is not credited to the Profit and Loss Account. It is credited to the Securities Premium Account, which is presented on the Equity and Liabilities side of the Balance Sheet under 'Reserves and Surplus'. …