Alexa Ltd. purchased building from Siri Ltd for ₹8,00,000. The consideration was paid by issue of 6%debentures of ₹100 each at a discount of 20%. The 6% Debentures account is credited with:

a) ₹10,40,000
b) ₹10,00,000
c) ₹9,60,000
d) ₹6,40,000

OR

Which of the following statements is incorrect about debentures?

a) Interest on debentures is an appropriation of profits.
b) Debenture holders are the creditors of a company.
c) Debentures can be issued to vendors at discount.
d) Interest is not paid on Debentures issued as Collateral Security.

Solution

b) ₹ 10,00,000

or

a).Interest on debentures is an appropriation of profits