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F Ltd. purchased Machinery from G Company for a book value of Rs. 4,00,000. The consideration was paid by issue of 10% debentures of Rs. 100 each at a premium of 25%. The debenture account was credited with ______.
  • a)
    Rs. 4,00,000
  • b)
    Rs. 5,00,000
  • c)
    Rs. 3,20,000
  • d)
    Rs. 3,00,000
Correct answer is option 'C'. Can you explain this answer?
Most Upvoted Answer
F Ltd. purchased Machinery from G Company for a book value of Rs. 4,00...
Calculation of Debenture Account Credit

Book Value of Machinery = Rs. 4,00,000

Premium on issue of Debentures = 25% of Rs. 4,00,000 = Rs. 1,00,000

Total Consideration Paid = Book Value + Premium = Rs. 4,00,000 + Rs. 1,00,000 = Rs. 5,00,000

Debentures issued = Total Consideration Paid / Face Value of Debentures = Rs. 5,00,000 / Rs. 100 = 5,000 Debentures

Credit to Debenture Account = Face Value of Debentures issued * Rate of Interest = 5,000 * 10% = Rs. 50,000

However, the question asks for the credit to Debenture Account, including the premium. So, the credit to Debenture Account would be:

Credit to Debenture Account = Face Value of Debentures issued * Rate of Interest + Premium on Issue of Debentures = 5,000 * 10% + Rs. 1,00,000 = Rs. 3,20,000

Therefore, option (c) Rs. 3,20,000 is the correct answer.
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Community Answer
F Ltd. purchased Machinery from G Company for a book value of Rs. 4,00...
No of debenture= 4,00,000/100+25= 3200

amount credit ro debenture ac 3200 ×100=3,20,000
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F Ltd. purchased Machinery from G Company for a book value of Rs. 4,00,000. The consideration was paid by issue of 10% debentures of Rs. 100 each at a premium of 25%. The debenture account was credited with ______.a)Rs. 4,00,000b)Rs. 5,00,000c)Rs. 3,20,000d)Rs. 3,00,000Correct answer is option 'C'. Can you explain this answer?
Question Description
F Ltd. purchased Machinery from G Company for a book value of Rs. 4,00,000. The consideration was paid by issue of 10% debentures of Rs. 100 each at a premium of 25%. The debenture account was credited with ______.a)Rs. 4,00,000b)Rs. 5,00,000c)Rs. 3,20,000d)Rs. 3,00,000Correct answer is option 'C'. Can you explain this answer? for CA CPT 2024 is part of CA CPT preparation. The Question and answers have been prepared according to the CA CPT exam syllabus. Information about F Ltd. purchased Machinery from G Company for a book value of Rs. 4,00,000. The consideration was paid by issue of 10% debentures of Rs. 100 each at a premium of 25%. The debenture account was credited with ______.a)Rs. 4,00,000b)Rs. 5,00,000c)Rs. 3,20,000d)Rs. 3,00,000Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA CPT 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for F Ltd. purchased Machinery from G Company for a book value of Rs. 4,00,000. The consideration was paid by issue of 10% debentures of Rs. 100 each at a premium of 25%. The debenture account was credited with ______.a)Rs. 4,00,000b)Rs. 5,00,000c)Rs. 3,20,000d)Rs. 3,00,000Correct answer is option 'C'. Can you explain this answer?.
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