Model: Redemption by conversion—Redemption of preferecne shares combined The summarized balance sheet of Sri Vasudev Ltd. on 30 September 2010 was as follows:
Issued and Fully Paid:
10,000 Equity Share of 100 Each Fully
Own Debentures of Nominal Value of
6% Redeemable Preference Share of
100 Each (Less Calls in Arrears on 400
Reserves & Surplus:
Cash at Bank
Profit & Loss A/c
On 30 September 2010, the following were due for redemption:
10,000 6% Redeemable preference shares at a premium of Rs.25 per share.
4,000 10% Redeemable debentures shares at a premium of 10% the redemption was made on that date or subsequently this:
For half the year ending 30 September 2010, the debentures interest and preference dividend was paid out of profits of the company
On an offer made to the 10% debenture, the outsiders agreed to take new 12% debentures at par in exchange of old debentures ; the company also decided to assume the new debentures
A fresh issue of 2,000 equity shares of Rs.100 each was made at a premium of Rs.50 per shares and subscribed in full. All moneys due were received forthwith
Redemption of all preference shares was made on 10 October 2010You are required to show all journal entries for the above transactions to give the company’s opening balance sheet after giving effect to them.
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