Read the following information carefully and answer the question.
A Limited took over assets of ₹3,00,000 and liabilities of ₹10,000 from X and co. Ltd. for an agreed purchase consideration of ₹2,70,000 to be satisfied by issue of 10% debentures of 100 each at a premium of 20%. The company also took a loan of ₹10,00,000 from Punjab National Bank and issued 10% debentures of ₹12,00,000 of 100 each as collateral security. The rate of Interest on loan is 12% p.a.
Calculate the amount of fixed obligation of the company.
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹1,42,500.
Fixed obligation means interest payment.
* Interest on loan = 10,00,000 x 12/100
= 1,20,000
Debentures amount = No of debentures x Face value
= 2,250 x 100
= 2,25,000
Issue price = 100 + 20% of 100 (securities premium)
= 100 + 20
= 120
No of debentures = Purchase consideration / issue price
= 2,70,000/120
= 2,250
* Interest on debentures = 2,25,000 x 10/100
= 22,500
Total fixed obligation = 1,20,000 + 22,500
= 1,42,500