Model: Issue of shares—Redemption of debentures At premium bonus shares The share capital of Gemini Ltd. consisted of 1,00,000 equity shares of Rs.10 each fully paid. The company has accumulated out of profits a reserve fund of Rs.10,00,000. It issued further 20,000 equity shares during 2010 at a premium of Rs.30 per share and the entire amount had been realized. An independent valuation of its assets increased the balance sheet values as thus:
|
Land and Buildings by |
Rs.12,00,000 |
|
Plant and Machinery by |
Rs.6,00,000 |
|
Stores and Spares by |
Rs.5,00,000 |
The valuation reduced the amounts of the following:
|
Goodwill by |
Rs.3,00,000 |
|
Patents by |
Rs.2,00,000 |
At the end of 2010, it was decided to redeem 6,000 debentures of Rs.100 each as 5% premium; to adopt the new valuation; and to allot two equity shares of Rs.10 each as fully paid bonus shares for every equity share held. It was also decided that the balance of reserve fund, after carrying out all the above arrangements, was to be capitalized. Pass journal entries to record these transactions in the books of Gemini Ltd.