Question

N Ltd. purchased fixed asset of Rs. 4,00,000 out of Rs. 1,30,000 paid in cash and balance in debentures. The consideration was paid by issue of 12% Debenture of 100 each at 10% discount. Number of debentures to be issued will be ____.

• A. 3,000
• B. 4,000
• C. 4,444
• D. 30,000

Answer 1

The correct option is A 3,000

Here, N ltd. paid Rs 1,30,000 in cash and the remaining Rs 2,70,000 in form of 12% debentures issued. The debentures were issued at Rs 100 each with 10% discount which means price of share was Rs 90 per share. Hence, number of shares issued is Rs 2,70,000/Rs 90 i.e. 3,000.