Target Exam

CUET

Subject

-- Accountancy Part A

Chapter

Issue and Redemption of Debentures

Question:

Read the following passage and answer the question.

To meet the requirements of funds for starting a new factory, the company issued 50,000, 10% debentures of र10 each and 2,000, 8% debentures of र100 each to the vendor of the machinery purchased for र7,00,000.

How many debentures should be issued, if 8% debentures of र100 each are issued at 20% discount amounting to र2,00,000?

Options:

2,000

2,500

500

1,500

Correct Answer:

2,500

Explanation:

The correct answer is option 2- 2,500.

Nominal value = र100
Discount = 20% 
Discount amount = 100 x 20/100
                           = र20

Number of debentures issued = 2,00,000/80
                                                = 2,500