Company Accounts

Debentures

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Suvidha Ltd. purchased machinery worth Rs.1,98,000 from Suppliers Ltd. The payment was made by issue of 12% debentures of Rs.100 each. How many debentures will be issued at a 10% discount?

3,200 debentures

1,900 Debentures

1,800 Debentures

2,200 debentures

✅ Correct Option: 4

When debentures are issued at a discount, the company receives less than the face value, but the liability recorded is at face value.

Given information:

Machinery cost = Rs. 1,98,000
Face value per debenture = Rs. 100
Discount = 10%

Calculating issue price per debenture:

Discount amount = 10% of Rs. 100 = Rs. 10

Issue price per debenture = Face value - Discount

= Rs. 100 - Rs. 10 = Rs. 90

Calculating number of debentures:

Since the machinery worth Rs. 1,98,000 needs to be paid through these debentures issued at Rs. 90 each:

Number of debentures = $\frac{\text{Total payment to be made}}{\text{Issue price per debenture}}$

= $\frac{1,98,000}{90}$

= 2,200 debentures

Note: The 12% mentioned refers to the interest rate on debentures and doesn't affect the calculation of number of debentures to be issued. The supplier will receive 2,200 debentures with a total face value of Rs. 2,20,000, though the actual consideration is Rs. 1,98,000.

Correct Option: 4

2025: 2 June Shift 2

Issue of Rs. 1,00,000, 9% debentures of Rs. 100 each at discount of 15% but redeemable at premium of 5%, the amount debited to loss on issue of debenture account is.

2023: 28 May Shift 1

XYZ Ltd. issued another category of debenture which are perpetual in nature. What type of debentures they are called :

2025: 14 May Shift 2

XYZ Ltd. purchased assets worth Rs. 3,00,000 from Blue Prints Ltd., and took over its liabilities worth Rs. 20,000 for a purchase consideration of Rs. 3,15,000. XYZ Ltd. paid the purchase consideration by issuing 12% debentures of Rs. 100 each at a premium of 5%.

How many debentures would be issued, if debentures were issued at par?

2023: 11 June Shift 3

Determine the number of Debentures to be issued.

2026: 13 May Shift 1

Which of the following statments are true ?

(A) Debentures cannot be issued for consideration other than cash.

(B) Interest is not paid on the debentures issued as collateral security.

(D) Premium on redemption of debentures is a loss for the company.

Choose the correct answer from the options given below:

2023: 28 May Shift 1

While issuing 10% debenture of Rs. 12,00,000 at 10% discount. What amount should be transferred to "Discount on issue of debenture A/c" if all amount is received in one instalment ?

Suvidha Ltd. purchased machinery worth Rs.1,98,000 from Suppliers Ltd. The payment was made by issue of 12% debentures of Rs.100 each. How many debentures will be issued at a 10% discount?

Solution

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