Read the following information and answer the question.
ABC Ltd. issued 20,000, 6% debentures of ₹100 each at a discount of 4% redeemable at a premium of 5% after 3 years from 1st April 2017. The amount payable on the application is ₹50 and the balance on the allotment. The company has a balance of ₹50,000 in securities premium reserve.
How much amount is received on application by the company?
Answer & explanation
Correct answer: option 1
The correct answer is option 1- ₹10,00,000.
Face value of debenture = ₹100
Amount payable on application = ₹50
Total no of debentures = 20,000
Amount received on application = 20,000 x 50
= 10,00,000