X Ltd. redeemed 100, 6% Debentures of Rs. 100 each by converting them into Equity Shares of Rs. 100 each. The 6% Debentures were redeemable at 10% premium for which the Equity Shares were issued at 25% premium. Pass the necessary Journal entries for the redemption of above-mentioned debentures in the books of X Ltd.
Journal Entries
|
Particulars |
LF |
Debit |
Credit |
|
6% Debenture a/c Dr Premium on redemption of debentures a/c Dr To Debenture Holders a/c (Being amount due to debenture holders)
|
|
10000 1000
11000 |
11000
8800 2200 |
|
Debenture Holders a/c Dr To Equity share capital a/c To Security premium a/c (Being 88 equity shares @ 100 each issued at 25% premium) |
Working note: Calculation of amount of equity share capital = (11000/125) * 100 = 8800.