Read the following information and answer the questions:
On 1st April 2013, a company made an issue of 10,000, 9% debentures of ₹100 each at ₹92 per debenture. The terms of issue provided for redemption of 2,000 debentures every year starting from 31st March 2016, either by conversion into equity shares of ₹20 each or by drawn of lot at par at companies option. On 31st March 2016 Company's redeemed 2,000, 9% debentures by converting them into equity shares of ₹20 each.
The amount of discount on issue of debentures:
Answer & explanation
Correct answer: option 1
The correct answer is Option 1- ₹80,000.
No of debentures = 10,000
Face value = ₹100 each
Discount = 100- 92
= ₹8
Total discount = 10,000 x 8
= ₹80,000