the shortfall in funds for the purpose of the redemption after utilizing the proceed 617016
ABC Ltd. has the following balance sheet as on 31 March 2011:
|
Liabilities |
Assets |
||
|
Share Capital: |
Fixed Assets |
11,00,000 |
|
|
Issued, |
Current Assets |
4,00,000 |
|
|
Subscribed & |
|||
|
Fully Paid Up |
|||
|
5,000 Equity |
5,00,000 |
||
|
Shares of Rs. 100 |
|||
|
Each |
|||
|
2,500 Pref. Shares of Rs.100 Each |
2,50,000 |
||
|
Capital Reserve |
50,000 |
||
|
Securities |
50,000 |
||
|
Premium A/c |
|||
|
General Reserve |
1,00,000 |
||
|
Profit & Loss A/c |
50,000 |
||
|
Current Liabilities |
5,00,000 |
||
|
15,00,000 |
15,00,000 |
The preference shares are to be redeemed at 10% premium. Fresh issue of equity shares is to be made to the extent it is required under the Companies Act for the purpose of this redemption. The shortfall in funds for the purpose of the redemption after utilizing the proceeds of the fresh issue are to be met by taking a bank loan. Show the journal entries.