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On 1st July 2007. A Ltd gave notice of their intention to redeem their outstanding Rs. 400,000 8% Debentures on 1st January, 2008 @ Rs.102 each and offered the holders the following options-(a) To subscibe for (i) 6% cumulative preference shares of Rs. 20 each at Rs. 22.50 per share, accepted by debenture holders of Rs. 1,71,000 or (ii) 12% debentures were issued @96% accepted by the holders of Rs.1,44,000 Debentures. (b) Remaining debentures to be redeemed for cash if neither of the option under (a) was accepted. Pass necessary journal entries. |
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Answer» (1) Case a (i) – No. of preference shares issued 7752. (2) Case a (ii)- No. of debentures issued 1530. (3) Remaining 85000 debentures paid in cash. |
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