Question:
Keya Ltd. issued 2,00,000, 8% debentures of \u20b9 100 each at 10% discount on 1st April, 2023. Interest is payable half-yearly on 30\textsuperscript{th} September and 31st March every year. Interest written off on 31st March, 2024 was:
Keya Ltd. issued 2,00,000, 8% debentures of \u20b9 100 each at 10% discount on 1st April, 2023. Interest is payable half-yearly on 30\textsuperscript{th} September and 31st March every year. Interest written off on 31st March, 2024 was:
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Debenture interest is always calculated on face value regardless of discount or premium.
Updated On: Jul 7, 2025
- 16,00,000 Rupees
- 14,40,000 Rupees
- 8,00,000 Rupees
- 7,20,000 Rupees
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The Correct Option is B
Solution and Explanation
Number of debentures = 2,00,000
Face value per debenture = \u20b9 100
Rate of interest = 8% annually
\[ \text{Total Face Value} = 2,00,000 \times 100 = \u20b9 2,00,00,000 \] \[ \text{Annual Interest} = 8% \times 2,00,00,000 = \u20b9 16,00,000 \] Interest is payable half-yearly, so two installments:
\[ \frac{16,00,000}{2} = \u20b9 8,00,000 \text{ each half year} \] For the year ended 31st March, 2024, total interest paid = \u20b9 16,00,000
But interest is paid on nominal value even if issued at discount.
However, since discount doesn't affect interest calculation, and 2 payments made (Sept and March), total = \u20b9 16,00,000
Interest written off = \u20b9 16,00,000 - \u20b9 1,60,000 (10% discount on issue = capital loss amortized over 10 years)
= \u20b9 14,40,000 Final Answer: \u20b9 14,40,000
Face value per debenture = \u20b9 100
Rate of interest = 8% annually
\[ \text{Total Face Value} = 2,00,000 \times 100 = \u20b9 2,00,00,000 \] \[ \text{Annual Interest} = 8% \times 2,00,00,000 = \u20b9 16,00,000 \] Interest is payable half-yearly, so two installments:
\[ \frac{16,00,000}{2} = \u20b9 8,00,000 \text{ each half year} \] For the year ended 31st March, 2024, total interest paid = \u20b9 16,00,000
But interest is paid on nominal value even if issued at discount.
However, since discount doesn't affect interest calculation, and 2 payments made (Sept and March), total = \u20b9 16,00,000
Interest written off = \u20b9 16,00,000 - \u20b9 1,60,000 (10% discount on issue = capital loss amortized over 10 years)
= \u20b9 14,40,000 Final Answer: \u20b9 14,40,000
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