Q/- The following item appear in the balancesheet of deshbandhu limited as on 31 march, 2000
(i)Share capital:
equity-
Authorised- 5,00,000 shares of10 each
Issued,suscribed, called, and paid up- 4,00,000 shares of Rs10 each
Preference-
authosired,issued,and suscribed- 60,000, 12%preference shares of20 fully paid
(II) Investment- Rs3,50,000
(iii) profit and loss A/c (CR bal) - Rs7,00,000
It has been decided to redeem the preference shares at the prenium of 5% as on 31 march,2000. It was futher decided to:
(A) sell the investment for Rs3,00,000
(B) Finance part of the redemption from company funds, subject to leaving a balance of2,00,000 in the profit and loss account
(C) Issue sufficient number of equity shares at prenium of Rs2 to raise the balance of the funds required .
the above decision have been carried out and the preference shares redeemed. Give the journal entry to record the above transaction
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