Internal reconstruction

sivaram (Asst Mgr-Taxation) (6918 Points)

26 August 2015  

Dear All

A Scheme of Reconstruction has been awarded by court


In the Balance sheet  Share Capital  exhibited as 20000 shares of Rs 10 each  Rs200000

If Adjustment is given as

1.Equity shares are reduced to Rs7.50

2.Equity Shares are Reduced by Rs7.50

Are both wordings one and the same how should I interpret the adjustment and passentries

Is it talking about reducing paid up value or Face Value


Give Journal entries for both the adjustment scenario with explanations


Thanks in advance