the company exercises its option to redeem preference shares on 1 january 2011 the c 616959
Model: Redemption of preference shares—At Par and out of profits The following is the extract of balance sheet of Shiva Co. Ltd. as on 31 December 2010:
|
Share Capital |
|
|
1,00,00 Equity shares of Rs.10 each |
10,00,000 |
|
20,000 redeemable preference shares of Rs.100 each} |
20,00,000 |
|
Capital reserve |
8,00,000 |
|
General reserve |
7,50,000 |
|
Profit & Loss A/c |
20,00,000 |
The Company exercises its option to redeem preference shares on 1 January 2011. The Company has sufficient cash. You are required to pass journal entries relating to redemption.