The following scheme of reconstruction has been duly approved:
- The shareholders to receive the following in lieu of their present holding of 25,000 shares of Rs.10 each:
- Fully paid equity shares equal to two- fifths of their holding
- 10% Preference shares, fully paid, to the extent of one-fifths the above new equity shares
- Rs.30,000 14% second debentures
- An issue of Rs.25,000 12% first debentures was made and allotted, payment for the same being received in cash forth with
- Goodwill which stood at Rs.75,000 was completely written off
- Plant & machinery which stood at Rs.50,000 was written down to Rs.37,500
- Freehold & leasehold premises which stood at Rs.87,500 were written down to Rs.75,000
Give journal entries in the books of the company necessitated by the above reconstruction.