Question

G Ltd purchased land and building from H Ltd. at a book value of Rs. 2,00,000. The consideration was paid by issue of 12% debentures of Rs. 100 each at a discount of 20%. For this transaction, the debentures account would be credited with -

• A. Rs. 2,60,000
• B. Rs. 2,50,00
• C. Rs. 2,40,00
• D. Rs. 1,60,000

Answer 1

The correct option is B Rs. 2,50,00

Debentures issued at discount of 20%.
Number of Debentures issued = 2,00,000/80
= 2500
Face Value of Debentures = Rs. 100
Debentures account would be credited with 2500*100 = Rs. 2,50,000