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Standard XII

Accountancy

Interest on Capital Exceeds Profits

A Company pur...

Question

A Company purchased 8% bonds at a cost of Rs. 12,00,000(face value Rs. 10,00,000) on January 1, 2003. Half yearly interest is payable on this investment on June 30 and December 31st each year. The company closes its accounts on 31-3-2003. The amount of accrued interest shown in profit and loss account for the year ended is?

Rs. 40,000

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Rs. 60,000

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Rs. 20,000

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Rs. 80,000

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Solution

The correct option is C Rs. 20,000
Amount of accrued interest = Face value * Rate/100 * 3/12
= 1000000 * 8/100 * 3/12
= Rs 20000

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The correct option is C Rs. 20,000Amount of accrued interest = Face value * Rate/100 * 3/12 = 1000000 * 8/100 * 3/12 = Rs 20000

The correct option is C Rs. 20,000
Amount of accrued interest = Face value * Rate/100 * 3/12
= 1000000 * 8/100 * 3/12
= Rs 20000