'A' Ltd purchased assets of the book value of ₹4,00,000 from another company and paid 50% in cash and rest by issuing 10% debenture of ₹100 each at a premium of ₹25, What is the number of debentures issued?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → 1,600.
Assets = ₹4,00,000
Paid 50% in cash and rest by issuing 10% debenture of ₹100 each at a premium of ₹25.
Remaining amount of assets after paying in cash of 50% is 50%.
Remaining asset = 4,00,000 x 50/100
= 2,00,000
2,00,000 is paid by issuing debentures at premium.
No of debenture issued = Purchase consideration/Issue price of debenture
= 2,00,000/(100 +25)
= 2,00,000/125
= 1,600
So, 1,600 debentures are issued for purchase consideration of 2,00,000.