Lily Ltd., having sufficient balance to the credit of general reserve and ₹1,00,000 balance in securities premium account, decides to : Redeem 5,000, 10% redeemable preference shares of ₹100 each fully paid-up at a premi

Journal entries in the books of Lily Ltd. Particulars Dr. (₹) Cr. (₹) (i) 10% Redeemable Preference Share Capital A/c Dr. 5,00,000 Premium on redemption A/c Dr. 25,000 To Preference Shareholders 5,25,000 (Amount due to redeemable preference shareholders on redemption at 5% premium) (ii) Security Premium A/c Dr. 25,000 To Premium on redemption A/c 25,000 (Premium on redemption provided) (iii) General Reserve A/c Dr. 5,00,000 To Capital Redemption Reserve A/c 5,00,000 (Amount of redemption transferred) (iv) Preference Shareholders A/c Dr. 5,25,000 To Bank 5,25,000 (Amount paid to preference shareholders) (v) Capital Redemption Reserve A/c 5,00,000 To Equity Shareholders 5,00,000 (Issue of 50,000 equity shares as fully paid up Bonus shares to existing equity shareholders)