Analyze the case given below and answer the questions.
Anil Technologies limited company issued 5,000, 9% Debentures of ₹100 each at a premium of ₹20 payable as follows:
1. ₹40 including premium of ₹10 on application
2. ₹40 including premium of ₹10 on allotment
3. Balance on first and final call
Applications were received for 5,000 debentures and allotment was made to all the applicants. All the calls were made and amounts received.
What is the total interest payable on the debentures issued for one year?
Answer & explanation
Correct answer: option 2
The correct answer is option 2- ₹45,000.
Nominal Value of Debentures = ₹5,00,000
Rate of Interest = 9%
Interest on Debentures = 5,00,000 x 9/100
= ₹45,000