Ananya Ltd. had an authorised capital of Rs. 10,00,00,000 divided into 10,00,000 equity shares of Rs. 100 each. The company had already issued 2,00,000 shares. The dividend paid per share for the year ended 31st March,2007 was Rs. 30. The management decided to export its products to African countries. To meet the requirements of additional funds, the finance manager put up the following three alternate proposals before the Board of Directors:
(a) Issue 47, 500 equity shares at a premium of Rs. 100 per share.
(b) Obtain a long-term loan from bank which was available at 12% per annum.
(c) Issue 9% Debentures at a discount of 5%. After evaluating these alternatives, the company decided to issue 1,00,000, 9% Debentures on 1st April, 2008. The face value of each debentures was Rs. 100. These debentures were redeemable in four installments starting from the end of third year, which were as follows:
| Year |
III |
IV |
V |
VI |
| Amount (Rs) |
10,00,000 |
20,00,000 |
30,00,000 |
40,00,000 |
Prepare 9% Debenture Account form 1st April, 2008 till all the debentures were redeemed.
