Read the following information and answer the question.

ABC Ltd offered 20,000, 12% debentures of ₹100 each at a premium of 10% payable as ₹40 on application (including premium) and balance on allotment redeemable after 8 years. 30,000 applications are received by the company and the allotment is made on pro-rata basis. All the money on application and allotment is received by the company timely.

How much amount is received on application by the company?

₹12,00,000

The correct answer is option 1- ₹12,00,000.

Application received = 30,000
Application money = ₹40 including premium
Total application money = 30,000 x 40
                                      = ₹12,00,000