BONUS ISSUE ......... JOURNAL

1. Capital  redemption reserve is  reserve  that  created  out  Profit & Loos Appropriation  account  , for various purpose  like  issue of bonus shares , redemption  of  preference shares etc. Capital  redemption reserve A/c , is under  Reserve surplus , liability  side , Balance sheet .

   At the time of issue of shares by the company  , shares are issued  at premium  , same premium  amount that  we received  is   transferred  to  " security  premium account"  is  called Security premium account  . security  premium account is under  reserve surplus  , liability  side  balance sheet ,

2 . As per Companies Act  , when company  decided  to issue Bonus shares , shares Can  be  issued  out  of   Capital redemption reserve , security premium account and General  reserve and  capitalize  the profit . 

   Above mentioned entries are of  

     i) Bonus  shares  are issued  out  of  reserve  and  same  shares are credited to  share holders account 

    ii)  bonus shares are transferred  to  equity  shares Capital  account  , and  capitalize  the  profit .