Question

On 1st April, 2023, Mudra Ltd. issued 9,000, 12% Debentures of 100 each at 10% premium, redeemable at a premium of 10% after 4 years. The interest due on debentures for the year ended 31^st March, 2024 was:

• A. 9,90,000
• B. 9,00,000
• C. 1,08,000
• D. 1,18,800

Hint:

Always calculate interest on debentures using the face value, not the amount received or payable at redemption.

Answer 1

The Correct Option is C

Step 1: Debentures issued = 9,000
Face value per debenture = 100
Interest rate = 12% per annum \[ \text{Interest} = \frac{12}{100} \times 9,000 \times 100 = 1,08,000 \] Note: Interest is calculated on face value, not issue price or redemption value.