ABC Ltd., issued 3,000, 14% Debentures of ₹100 each at a discount of 5% on April 1, 2023. Interest on these debentures is payable annually on March 31 each year. The debentures are redeemable at par in three equal instalments at the end of the third, fourth and fifth year. Discount on issue of debentures is-
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 15,000
Discount on issue of debentures is the face value of the debentures issued minus the amount the company receives for them.
Face value = 3,000 × Rs. 100 = Rs. 3,00,000
Discount = 5% of Rs. 3,00,000
= Rs. 15,000
Amount received = Rs. 3,00,000 − Rs. 15,000 = Rs. 2,85,000
The 14% rate is the interest on the debentures and the instalments decide the redemption; neither changes the discount on issue.
NCERT (2026-27 edition):
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