A Company issued ₹1,00,000, 9% Debentures of ₹100 each at a discount of 5% but redeemable at premium of 5%. The total amount received on such debenture is:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) - ₹95,000.
₹1,00,000, 9% Debentures of ₹100 each.
No of debentures = 1,00,000/100
= 1000
1000 debentures are issued at discount of 5%
Discount = 100 x 5/100
= ₹5
Price after discount = 100-5
= 95
Amount received = 1,000 x 95
= ₹95,000