educate me on the following

means debentures are discounted at @ 96%

96% means there is a discount of 4 questions........................further to solve this question amounts are required

Here 96% means that 14% debentures in Company 'X' will be issued at 4% discount.

Let 12% debentures in 'Y' Ltd.(Rs.100 each)  =  Rs.120000

and Let 14% debentures in 'X' ltd. are also have FV = Rs.100 per debenture.

then total amount to be discharged will be (Rs.120000+20% premium) = Rs.144000

Company 'X' will issue 14% debentures at Rs.96 and no. of debentures to be issued will be 1500. (144000/96)

Thus this 4% discount ultimately increasing no. of debentures. 

agree with amit's reply... 14% debentures are issued at 96% of its face value (ie, 4% discount) to settle 120% of the face value of 12% debentures... the solution will be the no of debentures eventually used to settle the no of the debentures in the other company.