A company issued 2,500, 9% Debentures of 100 each to public, on 1^st April 2021; 3,500 8% debentures of 100 each to vendor on 1^st July, 2021 and on the same date 5,000 7%, Debentures of 100 each as a Collateral Security. Calculate the Interest on Debentures for the year ending 31^st March, 2022.

₹43,500

The correct answer is Option (3) → 43,500

2,500, 9% Debentures of 100 to public on Ist April.
Interest  = 250000 x 9/100
             = 22500

3,500 8% debentures of 100 each to vendor on Ist July.
So only 9 months interest is calculated.
Interest = 350000 x 8/100 x 9/12
            = 21000

Total interest = 22500 + 21000
                   = 43500

* No interest is provided on debentures issued as collateral security.