X Ltd. purchased an asset of book value of Rs. 4,00,000 and took over the liability of Rs. 50,000 from Y Ltd. It was agreed that the purchase consideration, settled at Rs. 3,80,000, will be paid by issuing debentures of Rs. 100 each at a discount of 10 % . How many debentures will be issued by X Ltd. to Y Ltd.?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → 4,222
When debentures are issued to a vendor as purchase consideration, the number of debentures = purchase consideration ÷ issue price of one debenture. The book values of the asset and liability decide only the goodwill or capital reserve, not the number of debentures.
Issue price = Rs. 100 − 10% discount = Rs. 90
Number of debentures = 3,80,000 ÷ 90 = 4,222.22
Only whole debentures can be issued, so X Ltd. issues 4,222 debentures
Issuing 4,223 would give Y Ltd. debentures worth Rs. 3,80,070, more than the agreed consideration.
Note: This question is from NCERT (2026-27). NTA sets numerical questions from NCERT too, so do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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