Read the following information and answer the question.

ABC Ltd. issued 20,000, 6% debentures of ₹100 each at a discount of 4% redeemable at a premium of 5% after 3 years from 1st April 2017. The amount payable on the application is ₹50 and the balance on the allotment. The company has a balance of ₹50,000 in securities premium reserve and ₹1,00,000 in the capital reserve. Profit earned by the company in the year is ₹75,000.

How much amount is received on allotment by the company?

₹9,20,000

The correct answer is option 4- ₹9,20,000.

Face value of debenture = ₹100
Discount = 4%
Discount Amount = 100 x 4/100
                           = ₹4
Amount payable on application = ₹50
Amount payable on allotment = 100 - 50 - 4
                                               = ₹46

Total no of debentures = 20,000
Amount received on allotment  = 20,000 x 46
                                                 = 9,20,000