Romi Ltd. acquired assets of ₹24 lakh and took over creditors of ₹2 lakh from Kapil Enterprises. Romi Ltd. issued 8% debentures of ₹100 each at a premium of 10% as purchase consideration. How many debentures are issued for purchase consideration?
Answer & explanation
Correct answer: option 2
The correct answer is option 2-20000.
Purchase consideration = 24,00,000 - 2,00,000
= ₹22,00,000
No. of debentures issued = Purchase Consideration/ Issue Price of a Debenture
Issue price = 100 + Premium(100 X 10/100)
= 100 + 10
= 110
No of debentures issued = 22,00,000/110
= 20,000 debentures