Multiple choice

Koina Ltd. issued 15,00,000, 12% debentures of Rs. 50 each at premium of 10% payablae as Rs. 20 on application and balance on allotment. Debentures are redeemable at par after 6 years. All the money due on allotment was called up and received. The amount of premium will be

  1. Rs. 3,00,00,000

  2. Rs. 2,25,00,000

  3. Rs. 75,00,000

  4. Rs. 5,25,00,000

Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Premium = 10% of face value. 15,00,000 debentures × Rs. 50 face value × 10% = Rs. 75,00,000. Premium is calculated on total issue value, not amount received. Premium credited to Securities Premium Account.