A company purchased an asset of ₹1,10,000 from Y Ltd. Company and issued 10% Debentures of ₹100 each at 10% Premium to Y Ltd. as purchase consideration. How many debentures company has issued to Y ltd?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- 1,000 Debentures.
Face value of debenture = 100
Premium = 10%
Premium amount = 100 x 10/100
= 10
Issue price = Face value + Premium
= 100 + 10
= 110
No. of Debentures issued = Purchase Consideration/ Issue Price of Debenture
= 1,10,000/ 110
= 1,000 Debentures