R Ltd purchased a building from X Infra for ₹6,00,000 and the payment is to be made by the issue of shares for ₹100 each at a premium of 20%. Calculate the number of shares to be issued.

5,000 shares

The correct answer is option 1- 5,000 shares.

Machinery = 6,00,000

Shares are issued for ₹100 each at a premium of 20%
Premium = 100 x 20/100
              = 20

Issue price of shares = 100 + 20
                               = 120

No of shares issued = Purchase consideration/Issue price of share
                             = 6,00,000/120
                             = 5,000