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.
How much amount is received on allotment by the company?
Answer & explanation
Correct answer: option 4
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