Vanities Ltd. has an issue 1,000, 12% Redeemable Preference Shares of ₹100 each, repayable at a premium of 10%. These shares are to be redeemed out of the accumulated reserves, which are more than the necessary sum requi

Journal Entries in the Books of Vanities Limited Date Particulars L.F. Amount (Dr.) Amount (Cr.) General Reserve A/c Dr. ₹1,00,000 To Capital Redemption Reserve A/c ₹1,00,000 (Being transfer of reserve to capital redemption reserve account on redemption of redeemable preference shares.) 12% Redeemable Preference Share Capital A/c Dr. ₹1,00,000 Premium on redemption of preference share A/c Dr. ₹10,000 To 12% Preference Shareholders A/c ₹1,10,000 (Being amount payable to 12% preference shareholders on redemption of 12% preference shares at premium of 10%) Securities Premium Reserve A/c Dr. ₹10,000 To Premium on redemption of preference shares A/c ₹10,000 (Being application of securities premium account write off on premium on redemption of preference share) 12% Preference Shareholders A/c Dr. ₹1,10,000 To Bank A/c ₹1,10,000 (Being amount due to 12% preference shareholder on redemption paid.)