TL Ltd. purchased assets of a book value of 99,000 from another firm. The purchase consideration was to be paid by issuing 11% Debentures of 100 each at a discount of 10%. The number of Debentures the company needs to issue will be:
Answer & explanation
Correct answer: option 4
The correct answer is option 4- 1,100.
No. of debentures issued = Purchase Consideration / Issue Price of a Debenture
= 99,000 / 90
= 1,100
*Issue price of debenture = Face value - discount
= 100 - (100 x10/100)
= 100-10
= ₹90