Model: Redemption of preference shares rights issue The balance sheet of Veera & Co. Ltd. as on 31 March 2011 disclosed the following data:
|
Authorized Share Capital: |
|
|
3,000 9% Redeemable Preference Share of Rs.100 Each |
3,00,000 |
|
10,000 Equity Shares of Rs.100 Each |
10,00,000 |
|
Paid-Up Capital: |
|
|
1,500 9% Redeemable Preference Shares of Rs.100 Each |
1,50,000 |
|
7,500 Equity Shares of Rs.100 Each, Rs.80 Paid Up |
6,00,000 |
|
Capital Reserve |
70,000 |
|
General Reserve |
1,80,000 |
|
Securities Premium |
10,000 |
|
Profit & Loss A/c |
75,000 |
On 6 April 2011, the preference shares were to be redeemed at a premium of 10% for the purpose of redemption, the company decided to:
- Issue 2,500 10% Debentures of Rs.100 each
- Convert the partly paid-up equity shares into fully paid up without requiring the shareholders to pay for the same
- Issue fully paid rights shares of Rs.100 each at a premium of 20 % per share in the proportion of one share for every five shares held You are required to give necessary journal entries to record the above transactions.