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Question

X ltd issued 1,000 debentures at discount of 10% having face value of Rs.100 & redeemable at par. The company will pay back at the time of redemption.

A
Rs. 1,10,000
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B
Rs. 1,20,000
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C
Rs. 90,000
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D
Rs. 1,00,000
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Solution

The correct option is D Rs. 1,00,000
At the time of redemption, pay back amount
= No. of debentures x Face value of debenture
= 1,000 x Rs. 100
= Rs. 1,00,000
Because debentures are redeemed at par.

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