When shares are bought back at discount, the journal entry passed is:

CS Executive · Corporate and Management Accounting · PYQS · December 2024

(A) Equity Share Capital a/c Dr. To Equity Shareholders' a/c. To Share Discount a/c.

(B) Equity Share Capital a/c Dr. To Equity Shareholders' a/c. To Capital Reserve a/c.

(C) Equity Share Capital a/c Dr. Share Discount a/c Dr. To Equity Shareholders' a/c.

(D) Equity Shareholders' a/c Dr. To Equity Share Capital a/c. To Share Discount a/c.

Answer & Explanation:

Correct Answer: Option (B)

Official answer key: (B).

Topics: Share Capital