Model: Redemption out of fresh issue The following is the balance sheet of Vishal Ltd. as on 31 March 2011:
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Liabilities Don't use plagiarized sources. Get Your Custom Essay on
the directors decided to exercise this option and issued 25 000 shares of rs 10 each 617058
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Assets |
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1,00,000 Equity Shares of ? 10 Each |
10,00,000 |
Land & Buildings |
2,50,000 |
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Profit & Loss A/c |
1,00,000 |
Plant & Machinery |
7,50,000 |
|
General Reserve |
1,50,000 |
Furniture & Fixtures |
1,00,000 |
|
3,500, 10% Debentures of ? 100 Each |
3,50,000 |
Stock |
4,00,000 |
|
Sundry Creditors |
1,50,000 |
Debtors |
1,00,000 |
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Bills Receivable |
10,000 |
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Cash at Bank |
1,10,000 |
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Preliminary Expenses |
30,000 |
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|
17,50,000 |
17,50,000 |
The debenture trust deed provides that the company may redeem the debentures at a premium of 5% at any time before maturity. The directors decided to exercise this option and issued 25,000 shares of Rs.10 each at Rs.12 per share and 1,000 12% debentures of Rs.100 each for the purpose of redemption. Show the journal entries and post-redemption balance sheet in the prescribed form.
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