PQR Ltd. has issued 10000, 12% convertible debentures ₹100 each redeemable after a period of five years at a premium of 5%. The debenture holders also had the option at the time of redemption to convert 30% of their hold

CS Executive · Corporate Accounting and Financial Management · PYQS · June 2026
PQR Ltd. has issued 10000, 12% convertible debentures ₹100 each redeemable after a period of five years at a premium of 5%. The debenture holders also had the option at the time of redemption to convert 30% of their holdings into equity shares of ₹10 each at a price of ₹20 per share and balance in cash. Debenture holders amounting ₹2,00,000 opted to get their debentures converted into equity shares as per terms of the issue. You are required to calculate the number of shares issued and cash paid for redemption of remaining debentures.

Answer & Explanation:

Answer 4(c) Particulars Amount Total Debenture holders (₹2,00,000 / ₹100) 2000 Option for conversion 30% Number of debentures to be converted (30% of 2000) 600 Redemption value of 600 debentures at a premium of 5% [600 x (₹100+5)] ₹63000 Equity shares of ₹10 each issued on conversion [₹63000/₹20] 3150 shares Calculation of cash to be paid: Particulars Amount Number of debentures 2000 Less: number of debentures to be converted into equity shares (600) Remaining number of debentures 1400 Redemption value of 1400 debentures (1400 x ₹105) ₹147000

Topics: Corporate Accounting

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