A company issued 10,000 12% Debentures of ₹100 each at 20% Premium. Applications received for 8,000 Debentures. All the applications were accepted and debentures were allotted. What amount will be shown on the company's Balance Sheet in reserves and surplus?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹1,60,000.
Issued debentures = 10,000
Applications received = 8,000
Premium = 20% i.e. 100 x 20/100
= 20
Amount in securities premium reserve = 8,000 x 20
= 1,60,000
*Securities Premium will be shown in the Reserves and Surplus heading.