Below is the Balance Sheet of the Excellent Ltd. as at 31st March, 2011.

Liabilities  

Rs

 Assets  

Rs

 Share Capital:  

 

 Fixed Assets:  

 

 Authorised  

 15,00,000  

 Plant and Machinery  

 6,00,000  

 Issued and Subscribed:  

 

 Furniture and Fittings  

 75,000  

 2,000 8% Redeemable  

 

 Investments  

 1,00,000  

 Preference Shares of  

 

 

 

 100 each, fully  

 

 Current Assets, Loans  

 

 paid up  

 2,00,000  

 and Advances:  

 

 50,000 Equity Shares  

 

 (a) Current Assets  

 

 of 10 each fully  

 

 Stock  

 1,70,000  

 paid up  

 5,00,000  

 Debtors  

 65,000  

 Reserves and Surplus:  

 

 Cash at Bank  

 80,000  

 Capital Reserve  

 25,000  

 (b) Loans and Advances:  

 Nil  

 Securities Premium  

 30,000  

 

 

 General reserve  

 1,60,000  

   

 Profit and Loss Account  

 1,38,000  

   

 Current Liabilities and Provisions:

     

(A) Current liabilities: Sundry Creditors

37,000

   

(B) Provisions

     
 

10,90,000

 

10,90,000

On this date the company decided to redeem its preference shares at a premium of 5%. For this purpose, investments were sold for Rs.1,10,000 and Rs.10,000 equity shares of Rs.10 each were issued at a premium of Rs.1 each.

After redemption of preference shares, the company issued one bonus share of Rs.10 each for every five equity shares held.

Pass journal entries to record the above mentioned transactions and prepare the balance sheet as it would appear thereafter.