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6000 debentures were discharged by issuing Equity Shares of Rs. 10 each at 20% Premium. Find the number of shares issued.
- a)5000
- b)60000
- c)50000
- d)6000
Correct answer is option 'A'. Can you explain this answer?
Verified Answer
6000 debentures were discharged by issuing Equity Shares of Rs. 10 eac...
The number of equity shares issued will be 5,000.
We can find the number by following the steps given below-
We know that the amount of premium is calculated on the face value of the share.
Amount of premium=20% of the face value of a share
=20% of Rs. 10
=20×10/100
=Rs.2
So, the value per equity share= Face value of share+ amount of premium
=10+2
= Rs.12
Amount to be raised by issuing debentures= Number of debentures× face value of debentures
=6000×10
= Rs.60,000
Now, we know that the debentures were discharged and this amount is to be raised by issues equity shares.
So, the number of shares to be issued will be calculated by dividing the amount to be raised by the value per equity share
Number of equity shares= Amount to be raised by issuing shares/ Value per share
=60,000/12
=5,000
Therefore, the number of equity shares issued will be 5,000.
Most Upvoted Answer
6000 debentures were discharged by issuing Equity Shares of Rs. 10 eac...
Given:
Number of debentures discharged = 6000
Face value of Equity Shares = Rs. 10 each
Premium on Equity Shares = 20%
To find:
Number of Equity Shares issued
Solution:
1. Calculation of Face Value of Debentures:
Since the number of debentures has been discharged by issuing Equity Shares, we can assume that the face value of debentures is equal to the face value of Equity Shares.
Face Value of Debentures = Face Value of Equity Shares = Rs. 10
2. Calculation of Total Value of Debentures:
Total Value of Debentures = Face Value of Debentures x Number of Debentures
Total Value of Debentures = Rs. 10 x 6000 = Rs. 60,000
3. Calculation of Premium on Equity Shares:
Premium on Equity Shares = 20% of Face Value of Equity Shares
Premium on Equity Shares = 20% of Rs. 10 = Rs. 2
4. Calculation of Total Value of Equity Shares:
Total Value of Equity Shares = (Face Value + Premium) x Number of Equity Shares
Total Value of Equity Shares = (Rs. 10 + Rs. 2) x Number of Equity Shares
Total Value of Equity Shares = Rs. 12 x Number of Equity Shares
5. Calculation of Number of Equity Shares:
Total Value of Debentures = Total Value of Equity Shares
Rs. 60,000 = Rs. 12 x Number of Equity Shares
Number of Equity Shares = Rs. 60,000 / Rs. 12
Number of Equity Shares = 5000
Therefore, the number of Equity Shares issued is 5000.
Number of debentures discharged = 6000
Face value of Equity Shares = Rs. 10 each
Premium on Equity Shares = 20%
To find:
Number of Equity Shares issued
Solution:
1. Calculation of Face Value of Debentures:
Since the number of debentures has been discharged by issuing Equity Shares, we can assume that the face value of debentures is equal to the face value of Equity Shares.
Face Value of Debentures = Face Value of Equity Shares = Rs. 10
2. Calculation of Total Value of Debentures:
Total Value of Debentures = Face Value of Debentures x Number of Debentures
Total Value of Debentures = Rs. 10 x 6000 = Rs. 60,000
3. Calculation of Premium on Equity Shares:
Premium on Equity Shares = 20% of Face Value of Equity Shares
Premium on Equity Shares = 20% of Rs. 10 = Rs. 2
4. Calculation of Total Value of Equity Shares:
Total Value of Equity Shares = (Face Value + Premium) x Number of Equity Shares
Total Value of Equity Shares = (Rs. 10 + Rs. 2) x Number of Equity Shares
Total Value of Equity Shares = Rs. 12 x Number of Equity Shares
5. Calculation of Number of Equity Shares:
Total Value of Debentures = Total Value of Equity Shares
Rs. 60,000 = Rs. 12 x Number of Equity Shares
Number of Equity Shares = Rs. 60,000 / Rs. 12
Number of Equity Shares = 5000
Therefore, the number of Equity Shares issued is 5000.
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6000 debentures were discharged by issuing Equity Shares of Rs. 10 eac...
Option a is the correct answer journal entry is debenture a/c .......dr.,. 72000 to equity share capital a/c. 60000 to premium a/c. 12000
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6000 debentures were discharged by issuing Equity Shares of Rs. 10 each at 20% Premium. Find the number of shares issued.a)5000b)60000c)50000d)6000Correct answer is option 'A'. Can you explain this answer?
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