Question

Maharaja Ltd. took over assets of ₹15,00,000 and liabilities of ₹2,00,000 of Dolphin Ltd. for an agreed purchase consideration of ₹12,60,000. It was agreed that the purchase consideration will be paid by issuing 11% Debentures of ₹100 each at 10% discount. The number of debentures issued will be:

• A. 13,000
• B. 12,600
• C. 10,000
• D. 14,000

Hint:

The issue price of debentures is calculated after accounting for the discount. Always divide the purchase consideration by the adjusted issue price to determine the correct number of debentures.

Answer 1

The Correct Option is D

To determine the quantity of debentures issued, apply the formula: \[ \text{Number of Debentures} = \frac{\text{Purchase Consideration}}{\text{Issue Price per Debenture}}. \] Step 1: Ascertain the Issue Price per Debenture. Each debenture has a face value of ₹100 and is issued at a 10% discount. Consequently: \[ \text{Issue Price per Debenture} = ₹100 - (₹100 \times 10\%) = ₹100 - ₹10 = ₹90. \] Step 2: Compute the Number of Debentures. \[ \text{Number of Debentures} = \frac{\text{Purchase Consideration}}{\text{Issue Price per Debenture}} = \frac{₹12,60,000}{₹90}. \] \[ \text{Number of Debentures} = 14,000. \] Final Answer: The total debentures issued amount to \( \boxed{14,000} \).