Below given is the Balance Sheet of Bharat Chemical Ltd. as on 31st March, 2025. Balance Sheet of Bharat Chemical Ltd. as on 31st March, 2025 Liabilities : Amount (₹) Amount (₹) 2,00,000, 14% Preference shares of ₹ 100 e

CS Executive · Corporate Accounting and Financial Management · PYQS · December 2025
Below given is the Balance Sheet of Bharat Chemical Ltd. as on 31st March, 2025. Balance Sheet of Bharat Chemical Ltd. as on 31st March, 2025 Liabilities : Amount (₹) Amount (₹) 2,00,000, 14% Preference shares of ₹ 100 each, fully called 2,00,00,000 Less : Calls in arrears @ ₹ 20 per share 4,00,000 1,96,00,000 10,00,000 Equity shares of ₹ 10 each, ₹ 8 per share called 80,00,000 Less : Calls-in-arrears 20,000 Add : Calls-in-advance 10,000 79,90,000 Securities premium 5,10,000 General reserve 1,50,00,000 10,000, 15% Debentures @ ₹ 1,000 each, fully paid 1,00,00,000 Current liabilities and provisions 10,00,000 Total 5,41,00,000 Assets : Fixed Assets 1,30,00,000 Investments 28,00,000 Other current assets 2,15,00,000 Cash and bank balances 1,68,00,000 Total 5,41,00,000 On 1st April, 2025, the Board of Directors decided that : (i) The fully paid preference shares are to be redeemed at a premium of 4% on 1st May, 2025 and for that purpose 6 lakh equity shares of ₹ 10 each are to be issued at a premium of 5%. Considering the information given above, pass the required journal entries in the books of the company.

Answer & Explanation:

Bharat Chemical Ltd. Journal Entries Date Particulars Dr. (₹) Cr. (₹) May 1, 2025 Bank A/c Dr. To Equity Share Capital A/c To Securities Premium A/c (Being Equity Shares issued at premium) 63,00,000 60,00,000 3,00,000 Securities Premium A/c Dr. To Premium on Redemption of Redeemable Preference Shares A/c (Being Premium on Redemption of Preference shares provided) 7,20,000 7,20,000 General Reserve A/c Dr. To Capital Redemption Reserve A/c (Being capital redemption reserve account created) 1,20,00,000 1,20,00,000 14% Preference Share Capital A/c Dr. Premium on Redemption A/c Dr. To Preference Shareholders A/c (Being amount due to preference shareholders) 1,80,00,000 7,20,000 1,87,20,000 Preference Shareholders A/c Dr. To Bank A/c (Being paid to preference shareholders) 1,87,20,000 1,87,20,000

Topics: Corporate Accounting

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