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On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will be
- a)Rs. 2,80,000
- b)Rs. 2,33,333
- c)Rs. 3,36,000
- d)Rs.2,56,667
Correct answer is option 'D'. Can you explain this answer?
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On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs....
Calculation of Interest Expenditure on Convertible Debentures
Issuance of Debentures
- Y Ltd. issued 40,000 convertible debentures of Rs. 100 each at a premium of 20% on May 01, 2009.
- The total amount raised by the company through debentures is calculated as follows:
- Face Value of Debentures = 40,000 x 100 = Rs. 40,00,000
- Premium on Debentures = 40,000 x 100 x 20% = Rs. 8,00,000
- Total Amount Raised = Face Value + Premium = Rs. 48,00,000
Interest Payable
- Interest on the debentures is payable on September 30 and March 31 every year.
- Since the debentures were issued on May 01, 2009, interest will be payable on September 30, 2009, and March 31, 2010.
Calculation of Interest Expenditure
- The interest expenditure for the year ended March 31, 2010, will include the interest payable on September 30, 2009, and March 31, 2010, from the date of issue.
- The interest payable on each date is calculated as follows:
- Interest Rate = 7%
- Face Value of Debentures = Rs. 100
- Premium on Debentures = 20%
- Total Interest Payable = Face Value x Interest Rate x Premium / 100 = 100 x 7% x 20% = Rs. 14
- The interest payable on September 30, 2009, is for a period of 5 months (May 01, 2009, to September 30, 2009), and the interest payable on March 31, 2010, is for a period of 7 months (October 01, 2009, to March 31, 2010).
- Therefore, the interest expenditure for the year ended March 31, 2010, is calculated as follows:
- Interest Payable on September 30, 2009 = 40,000 x 14 = Rs. 5,60,000
- Interest Payable on March 31, 2010 = 40,000 x 14 = Rs. 5,60,000
- Total Interest Payable = Rs. 5,60,000 + Rs. 5,60,000 = Rs. 11,20,000
- Interest Expenditure = Total Interest Payable - Interest Payable on March 31, 2009 = Rs. 11,20,000 - Rs. 4,63,333 = Rs. 7,56,667
- Therefore, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010, is Rs. 2,56,667 (Rs. 7,56,667 - Rs. 5,00,000).
Issuance of Debentures
- Y Ltd. issued 40,000 convertible debentures of Rs. 100 each at a premium of 20% on May 01, 2009.
- The total amount raised by the company through debentures is calculated as follows:
- Face Value of Debentures = 40,000 x 100 = Rs. 40,00,000
- Premium on Debentures = 40,000 x 100 x 20% = Rs. 8,00,000
- Total Amount Raised = Face Value + Premium = Rs. 48,00,000
Interest Payable
- Interest on the debentures is payable on September 30 and March 31 every year.
- Since the debentures were issued on May 01, 2009, interest will be payable on September 30, 2009, and March 31, 2010.
Calculation of Interest Expenditure
- The interest expenditure for the year ended March 31, 2010, will include the interest payable on September 30, 2009, and March 31, 2010, from the date of issue.
- The interest payable on each date is calculated as follows:
- Interest Rate = 7%
- Face Value of Debentures = Rs. 100
- Premium on Debentures = 20%
- Total Interest Payable = Face Value x Interest Rate x Premium / 100 = 100 x 7% x 20% = Rs. 14
- The interest payable on September 30, 2009, is for a period of 5 months (May 01, 2009, to September 30, 2009), and the interest payable on March 31, 2010, is for a period of 7 months (October 01, 2009, to March 31, 2010).
- Therefore, the interest expenditure for the year ended March 31, 2010, is calculated as follows:
- Interest Payable on September 30, 2009 = 40,000 x 14 = Rs. 5,60,000
- Interest Payable on March 31, 2010 = 40,000 x 14 = Rs. 5,60,000
- Total Interest Payable = Rs. 5,60,000 + Rs. 5,60,000 = Rs. 11,20,000
- Interest Expenditure = Total Interest Payable - Interest Payable on March 31, 2009 = Rs. 11,20,000 - Rs. 4,63,333 = Rs. 7,56,667
- Therefore, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010, is Rs. 2,56,667 (Rs. 7,56,667 - Rs. 5,00,000).
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On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will bea)Rs. 2,80,000b)Rs. 2,33,333c)Rs. 3,36,000d)Rs.2,56,667Correct answer is option 'D'. Can you explain this answer?
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On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will bea)Rs. 2,80,000b)Rs. 2,33,333c)Rs. 3,36,000d)Rs.2,56,667Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will bea)Rs. 2,80,000b)Rs. 2,33,333c)Rs. 3,36,000d)Rs.2,56,667Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will bea)Rs. 2,80,000b)Rs. 2,33,333c)Rs. 3,36,000d)Rs.2,56,667Correct answer is option 'D'. Can you explain this answer?.
On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will bea)Rs. 2,80,000b)Rs. 2,33,333c)Rs. 3,36,000d)Rs.2,56,667Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will bea)Rs. 2,80,000b)Rs. 2,33,333c)Rs. 3,36,000d)Rs.2,56,667Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will bea)Rs. 2,80,000b)Rs. 2,33,333c)Rs. 3,36,000d)Rs.2,56,667Correct answer is option 'D'. Can you explain this answer?.
Solutions for On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will bea)Rs. 2,80,000b)Rs. 2,33,333c)Rs. 3,36,000d)Rs.2,56,667Correct answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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Here you can find the meaning of On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will bea)Rs. 2,80,000b)Rs. 2,33,333c)Rs. 3,36,000d)Rs.2,56,667Correct answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will bea)Rs. 2,80,000b)Rs. 2,33,333c)Rs. 3,36,000d)Rs.2,56,667Correct answer is option 'D'. Can you explain this answer?, a detailed solution for On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will bea)Rs. 2,80,000b)Rs. 2,33,333c)Rs. 3,36,000d)Rs.2,56,667Correct answer is option 'D'. Can you explain this answer? has been provided alongside types of On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will bea)Rs. 2,80,000b)Rs. 2,33,333c)Rs. 3,36,000d)Rs.2,56,667Correct answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice On May 01, 2009, Y Ltd. issued 7% 40,000 convertible debentures of Rs.100 each at a premium of 20%. Interest is payable on September 30 and March 31, every year.Assuming that the interest runs from the date of issue, the amount of interest expenditure debited to Profit and Loss Account for the year ended March 31, 2010 will bea)Rs. 2,80,000b)Rs. 2,33,333c)Rs. 3,36,000d)Rs.2,56,667Correct answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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