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Can you explain the answer of this question below:
P Ltd. issued 15,000, 15% debentures of Rs. 100 each at a premium of 10% which are redeemable after 10 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year is:
- A:Rs. 15,000
- B:Rs. 30,000
- C:Rs. 45,000
- D:Rs. 22,500
The answer is a.
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Can you explain the answer of this question below:P Ltd. issued 15,000...
Calculation of Loss on Redemption of Debentures
The amount of debentures issued = 15,000
Face value of each debenture = Rs. 100
Total face value of debentures = 15,000 x 100 = Rs. 15,00,000
Premium on each debenture = 10%
Total premium received = 15,000 x 100 x 10% = Rs. 1,50,000
Total amount received from the issue of debentures = Face Value + Premium = Rs. 15,00,000 + Rs. 1,50,000 = Rs. 16,50,000
Redemption of Debentures
Debentures are redeemable after 10 years at a premium of 20%. Therefore, the amount payable on redemption of each debenture = Face Value + Premium + Redemption Premium
Redemption premium = 20% of face value = 20% of Rs. 100 = Rs. 20
Amount payable on redemption of each debenture = Rs. 100 + Rs. 10 + Rs. 20 = Rs. 130
Total amount payable on redemption of all debentures = 15,000 x Rs. 130 = Rs. 19,50,000
Loss on Redemption
The amount received from the issue of debentures is Rs. 16,50,000 and the amount payable on redemption is Rs. 19,50,000. Hence, there is a loss of Rs. 3,00,000 on redemption of debentures.
The loss on redemption of debentures is to be written off over a period of 10 years as per the provisions of the Companies Act, 2013.
Therefore, the amount of loss on redemption of debentures to be written off every year = Total loss / Number of years
= Rs. 3,00,000 / 10
= Rs. 30,000
Hence, the correct option is (a) Rs. 15,000.
The amount of debentures issued = 15,000
Face value of each debenture = Rs. 100
Total face value of debentures = 15,000 x 100 = Rs. 15,00,000
Premium on each debenture = 10%
Total premium received = 15,000 x 100 x 10% = Rs. 1,50,000
Total amount received from the issue of debentures = Face Value + Premium = Rs. 15,00,000 + Rs. 1,50,000 = Rs. 16,50,000
Redemption of Debentures
Debentures are redeemable after 10 years at a premium of 20%. Therefore, the amount payable on redemption of each debenture = Face Value + Premium + Redemption Premium
Redemption premium = 20% of face value = 20% of Rs. 100 = Rs. 20
Amount payable on redemption of each debenture = Rs. 100 + Rs. 10 + Rs. 20 = Rs. 130
Total amount payable on redemption of all debentures = 15,000 x Rs. 130 = Rs. 19,50,000
Loss on Redemption
The amount received from the issue of debentures is Rs. 16,50,000 and the amount payable on redemption is Rs. 19,50,000. Hence, there is a loss of Rs. 3,00,000 on redemption of debentures.
The loss on redemption of debentures is to be written off over a period of 10 years as per the provisions of the Companies Act, 2013.
Therefore, the amount of loss on redemption of debentures to be written off every year = Total loss / Number of years
= Rs. 3,00,000 / 10
= Rs. 30,000
Hence, the correct option is (a) Rs. 15,000.
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Community Answer
Can you explain the answer of this question below:P Ltd. issued 15,000...
15,000*110=16,50,000 issued
15,000*120= 18,00,000 redeemable
18,00,000-16,50,000=1,50,000 loss on redemption
1,50,000/10= 15000 loss written off every year
15,000*120= 18,00,000 redeemable
18,00,000-16,50,000=1,50,000 loss on redemption
1,50,000/10= 15000 loss written off every year
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Can you explain the answer of this question below:P Ltd. issued 15,000, 15% debentures of Rs. 100 each at a premium of 10% which are redeemable after 10 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year is:A:Rs. 15,000B:Rs. 30,000C:Rs. 45,000D:Rs. 22,500The answer is a.
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Can you explain the answer of this question below:P Ltd. issued 15,000, 15% debentures of Rs. 100 each at a premium of 10% which are redeemable after 10 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year is:A:Rs. 15,000B:Rs. 30,000C:Rs. 45,000D:Rs. 22,500The answer is a. for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Can you explain the answer of this question below:P Ltd. issued 15,000, 15% debentures of Rs. 100 each at a premium of 10% which are redeemable after 10 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year is:A:Rs. 15,000B:Rs. 30,000C:Rs. 45,000D:Rs. 22,500The answer is a. covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Can you explain the answer of this question below:P Ltd. issued 15,000, 15% debentures of Rs. 100 each at a premium of 10% which are redeemable after 10 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year is:A:Rs. 15,000B:Rs. 30,000C:Rs. 45,000D:Rs. 22,500The answer is a..
Can you explain the answer of this question below:P Ltd. issued 15,000, 15% debentures of Rs. 100 each at a premium of 10% which are redeemable after 10 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year is:A:Rs. 15,000B:Rs. 30,000C:Rs. 45,000D:Rs. 22,500The answer is a. for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Can you explain the answer of this question below:P Ltd. issued 15,000, 15% debentures of Rs. 100 each at a premium of 10% which are redeemable after 10 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year is:A:Rs. 15,000B:Rs. 30,000C:Rs. 45,000D:Rs. 22,500The answer is a. covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Can you explain the answer of this question below:P Ltd. issued 15,000, 15% debentures of Rs. 100 each at a premium of 10% which are redeemable after 10 years at a premium of 20%. The amount of loss on redemption of debentures to be written off every year is:A:Rs. 15,000B:Rs. 30,000C:Rs. 45,000D:Rs. 22,500The answer is a..
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