X Ltd. Whose issued share capital on 31 March 2013 consisted of 24,000,10% Preference shares of Rs.100 each fully paid up and 60,000 Equity share of Rs.100 each, Rs. 90 paid up, decided to redeem preference shares at a premium of Rs.10 per share .The company’s balance sheet as on 31-3-2013 showed a general reserve of Rs.28,00,000.The redemption was effected partly out of the proceeds of a new issue of 12,000 equity shares of Rs.100 each at a premium of Rs.35 per share .The premium payable on the redemption was met out of the premium received on the new issue .On 1 July 2013, the company at its general meeting resolved that the reserves be applied in the following manner:i) The declaration of bonus at the rate of Rs.10 per share on the equity share for the purpose of making the said equity share fully paid, andii) The issue of bonus shares to old equity shareholders in the ratio of one share for every five shares held by themYou are required to pass necessary journal entries.
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