A Ltd. Issued 10,000, 6% Debentures of ₹100 each at a discount of 10% payable ₹40 on application and the balance on allotment. How much amount would be debited to Bank account at the time of allotment?

₹5,00,000

The correct answer is option 2- ₹5,00,000.

Debentures = 10,000
Face value per debenture = 100
Application amount = 40
Discount = 10%
Discount amount = 100 x 10/100
                            = 10
Allotment amount = 100 - 40 - 10
                             = 50

Amount received on allotment = 10,000 x 50
                                                = 5,00,000