Question

A limited company issued 25,000 7% redeemable preference shares of 100 each at par.
On 30-6-2018 the shares are to be redeemed at 110 a share and for the purpose of assisting the
redemption, 1,50,000 equity shares of * 10 each were issued at par. On the above date 1,000 redeemable
preference shares were forfeited for non-payment of the last call of 25.800 of which had been reissued as
fully paid for * 60 a share. The balance of Statement of Profit and Loss was * 12,10,000 and general
reserve 3,00,000. On the same day as the redemption took place, a bonus share dividend was declared of
12,50,000. Show ledger accounts as on 30-6-2018.
(G.N.D.U. B.Com. (Prof.) March, 2013)
Solution :​

Answer 1

Answer:

When new shares are issued at par

Bank Account Dr.

To Share Capital Account

(Being the issue of….shares of Rs…

each for the purpose of redemption of

preference shares, as per Board’s

Resolution No….dated…..)