These balances were included on the statement of financial position of Thebe Ltd as at 30 June 20x9:

1. On 31 August 20x9, the preference shares were redeemed at a premium of 40c/share.

The redemption was financed by the issue of:
– 3 000 ordinary shares at an issue price of R4/share.

– 1 000 12% debentures @ R2 each issued at par value.

– The invitation to subscribe for shares was duly published and on 31 August 20x9 6 000 ordinary shares and 1 000 debentures were applied for. On the same day, the shares and debentures were allotted and the unsuccessful applicants were refunded their application money.

2. The following expenses were incurred:

– R1 000 share issue expenses.

– R400 debenture issue expenses.

– The dividend of R200 payable to preference shareholders to 31 August 20x9 was paid. (Ignore dividend tax.)

3. The directors wish to write off all issue expenses.

You are required to:

Record all the transactions (in journal entry form) relating to the redemption of preference shares, and the issue of shares and debentures in terms of the above information. (Narrations are not required.)

Transcribed Image Text:

Share capital 20 000 ordinary shares 10 000 redeemable preference shares (fixed annual dividend of 12c/share) Retained earnings 74 300 00 10 000 00 120 000 00 204 300 00