Rancho Ltd. was running successfully since last 8 years. Post covid there were some financial problems faced by firm, like many industries were facing - Accountancy MCQ CUET Accountancy 2023 11 June Shift 3 2026 | ExamTest.live

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Rancho Ltd. was running successfully since last 8 years. Post covid there were some financial problems faced by firm, like many industries were facing. Due to their past reputation they could manage the permission from SEBI for issuing of shares on 1 Aug, 2022. They also decided to issue 12% Debentures of Rs. 100 each at 10% Discount and were to be redeemed at 25% premium in such a way that they could arrange fund of Rs. 45, 00, 000 . At the time of issue of Debenture they also issued equity Share of Rs. 30, 00, 000 at 20% premium.Interest payable on the Debentures issued for the year ended Mar, 31st 2023 will be:

Solution & Step-by-step Explanation

1. Interest is always calculated on the nominal face value of the debentures: Total Nominal Face Value = 50, 000 \times 100 = Rs. 50, 00, 000 The debentures were issued on 1st August 2022. The financial period ends on 31st March 2023. This gives a holding period of exactly 8 months (August to March).Calculate the interest expense: Interest = Nominal Value \times Interest Rate \times \frac{Months}{12} Interest = 50, 00, 000 \times 12% \times \frac{8}{12} = 50, 00, 000 \times 0.12 \times \frac{8}{12} = Rs. 4, 00, 000

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Rancho Ltd. was running successfully since last 8 years. Post covid there were some financial problems faced by firm, like many industries were facing. Due to their past reputation they could manage the permission from SEBI for issuing of shares on 1 Aug, 2022. They also decided to issue 12% Debentures of Rs. 100 each at 10% Discount and were to be redeemed at 25% premium in such a way that they could arrange fund of Rs. 45, 00, 000 . At the time of issue of Debenture they also issued equity Share of Rs. 30, 00, 000 at 20% premium.Interest payable on the Debentures issued for the year ended Mar, 31st 2023 will be:

Rs. 4, 00, 000

Rs. 5, 40, 000

Rs. 6, 00, 000

Rs. 3, 60, 000

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