Based on following information answer question:
Apex Ltd. issued to public ₹10,00,000, 10% Debentures of ₹100 each at par, redeemable at a premium of 20%. It also issued 10,000, 11% Debentures of ₹100 each as collateral security against a bank loan of ₹8,00,000.
The company bought building worth ₹50,00,000 from Beta Ltd. against a cheque of ₹20,00,000 and balance by issue of 12% Debentures of ₹100 each at a premium of 20%.
Number of debentures issued to Beta Ltd. is __________.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → 25,000
The vendor (Beta Ltd.) is paid partly by cheque and the balance by issuing debentures. When debentures are issued to a vendor at a premium, the number of debentures is the amount payable in debentures divided by the issue price (face value + premium), not by the face value.
Purchase consideration (building) = ₹50,00,000
Less: Paid by cheque = ₹20,00,000
Balance to be paid by debentures = ₹30,00,000
Issue price per debenture = ₹100 + 20% of ₹100 = ₹120
Number of debentures = ₹30,00,000 ÷ ₹120 = 25,000