Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Issue and Redemption of Debentures

Question:

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 ₹100 each as collateral security of against 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 __________.

Options:

25,000

30,000

41,000

26,000

Correct Answer:

25,000

Explanation:

The correct answer is Option (1) - 25,000.

Building purchased and ₹30,00,000 paid by issue of 12% Debentures of ₹100 each at a premium of 20%.
No of debentures issued = Purchase consideration / Issue price
Issue price = 100 + 20 (20% of 100 as premium)
                 =  3000000/120
                 = 25000