company having 1,00,000 12% preference shares of Rs.10 each decided to consolidate the shares into shares of Rs.100 each. Pass the needed journal entry.
Journal Entry
|
Date |
Paniculars |
L.F. |
Dr. ) |
Cr. () |
|
12% Preference Share Capital Cl,00,07 x 10) Dr. |
10,00,07 |
10,00,07 |
One should note here that the paid up share capital remains the same, i.e. Rs.10,00,000 only, but total number of shares is reduced to 10,000 from 1,00,000 shares. The face value of shares is increased from Rs.10 to Rs.100. Care should be taken in case of partly paid shares to keep the proportion between the paid-up and unpaid amount at the same level after consolidation.