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Z Limited purchased plant and machinery for rs. 2,00,000 payable as rs. 65000 in cash and the balance by an issue of 6% debentures of rs. 1000 each at a discount of 10% . Discount on issue of debenture will be .?
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Z Limited purchased plant and machinery for rs. 2,00,000 payable as rs...
Calculation of Discount on Issue of Debentures:
The purchase price of the plant and machinery is Rs. 2,00,000. The payment for the purchase is divided into two parts: Rs. 65,000 in cash and the balance through the issue of debentures.
Cash Payment:
The cash payment made by Z Limited is Rs. 65,000.
Debentures:
The balance payment of Rs. 1,35,000 is made through the issue of debentures. The debentures have a face value of Rs. 1000 each and are issued at a discount of 10%.
Face Value of Debentures:
The face value of each debenture is Rs. 1000.
Number of Debentures:
To calculate the number of debentures, divide the balance payment by the face value of each debenture.
Number of debentures = Rs. 1,35,000 / Rs. 1000 = 135
Discount on Issue of Debentures:
To calculate the discount on the issue of debentures, multiply the face value of each debenture by the number of debentures and then multiply it by the discount rate.
Discount on issue of debentures = Rs. 1000 * 135 * 10% = Rs. 13,500
Explanation:
Z Limited purchased plant and machinery for Rs. 2,00,000. Out of this, Rs. 65,000 was paid in cash and the balance of Rs. 1,35,000 was paid through the issue of debentures. The debentures were issued at a discount of 10%.
The face value of each debenture is Rs. 1000 and the number of debentures issued is 135. The discount on the issue of debentures is calculated by multiplying the face value of each debenture by the number of debentures and then multiplying it by the discount rate.
In this case, the discount on the issue of debentures is Rs. 13,500. This means that Z Limited will receive Rs. 1,21,500 (Rs. 1,35,000 - Rs. 13,500) from the issue of debentures.
The discount on the issue of debentures is a non-cash expense that is recognized in the financial statements of the company. It represents the difference between the face value of the debentures and the amount received from their issue. The discount on the issue of debentures is amortized over the life of the debentures and is shown as an expense in the profit and loss account.
The purchase price of the plant and machinery is Rs. 2,00,000. The payment for the purchase is divided into two parts: Rs. 65,000 in cash and the balance through the issue of debentures.
Cash Payment:
The cash payment made by Z Limited is Rs. 65,000.
Debentures:
The balance payment of Rs. 1,35,000 is made through the issue of debentures. The debentures have a face value of Rs. 1000 each and are issued at a discount of 10%.
Face Value of Debentures:
The face value of each debenture is Rs. 1000.
Number of Debentures:
To calculate the number of debentures, divide the balance payment by the face value of each debenture.
Number of debentures = Rs. 1,35,000 / Rs. 1000 = 135
Discount on Issue of Debentures:
To calculate the discount on the issue of debentures, multiply the face value of each debenture by the number of debentures and then multiply it by the discount rate.
Discount on issue of debentures = Rs. 1000 * 135 * 10% = Rs. 13,500
Explanation:
Z Limited purchased plant and machinery for Rs. 2,00,000. Out of this, Rs. 65,000 was paid in cash and the balance of Rs. 1,35,000 was paid through the issue of debentures. The debentures were issued at a discount of 10%.
The face value of each debenture is Rs. 1000 and the number of debentures issued is 135. The discount on the issue of debentures is calculated by multiplying the face value of each debenture by the number of debentures and then multiplying it by the discount rate.
In this case, the discount on the issue of debentures is Rs. 13,500. This means that Z Limited will receive Rs. 1,21,500 (Rs. 1,35,000 - Rs. 13,500) from the issue of debentures.
The discount on the issue of debentures is a non-cash expense that is recognized in the financial statements of the company. It represents the difference between the face value of the debentures and the amount received from their issue. The discount on the issue of debentures is amortized over the life of the debentures and is shown as an expense in the profit and loss account.
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Z Limited purchased plant and machinery for rs. 2,00,000 payable as rs. 65000 in cash and the balance by an issue of 6% debentures of rs. 1000 each at a discount of 10% . Discount on issue of debenture will be .?
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