Question: I need an explanation for this question Example 5 $1,000 debentures, issued at a premium of 5% Redeemed at a premium of 20% Case 1:

I need an explanation for this question

Example 5 $1,000 debentures, issued at a premium of 5% Redeemed at a premium of 20% Case 1: 1,200 $1 ordinary shares at par These balances may not be the same, as some funds may have been used up in the bonus issue and redemption Balance before new issue Premium on new issue Balance after new issue Less: Amount transferred to the redemption account (should be the lower of the balance after the new issue Case 1 $ 10 - 10 or 10 the original premium on the issue) Balance after redemption 1000*5%=50 17 Dr. Cr. 1000 1000 1200 1200 Debentures Debenture Redemption Being redemption of debehtres -- Bank Ordinary Share Being issue of ordinary shares Share Premium Profit and loss Debenture Redemption (1000*20%) Being premium on redemption Debenture Redemption Bank (1000*1.2) Being amount paid on redemption 10 190 200 1200 1200

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

PSY-520 Graduate Statistics Topic 3 - Benchmark - Correlation and Regression Project Directions: Use the following information to complete the questions below. Use the following data points that have...

I need an explanation for (share premium) how to calculate it? Example 5 $1. poo debentures, issued at a premium of 5% Redeemed at a premium of 20% --- Case 2: 1,000 $1 ordinary shares at a 10%...

Income statement and statement of comprehensive income for Hansenpheet plc. AC330 - Financial Accounting, Analysis and Valuation Class Exercise Pack 2012-13 Lent Term 2013 Professor Richard Macve The...

how I got 10$ as a "balance before new issue"? Example 5 $1Doo debentures, issued at a premium of 5% Redeemed at a premium of 20% Case 1 $ ? 10 10 Case 1: 1,200 $1 ordinary shares at par These...

Case 1 Debt Footnote Macy's The purpose of this case is to understand how bonds are issued and how bonds are shown on the financial statements. Necessary portions of the 10-K for Macy's and a bond...

Dashboard / My courses / MAC2602-22-S1 / Welcome Message / Assessment 1 Question 6 Not yet answe Marked out of Sparta Pty (Ltd) purchases an average of R100 000 of inventory from its supplier on an...

Flynn Ltd is undergoing a period of significant growth and needed to raise capital. lt has done this by issuing ordinary shares, preferences shares and debentures to the public. Flynn Ltd has a 31...

QUESTION 2 (Green book) (30 MARKS) Sansung Limited was registered as a company in South Africa in 1998. The memorandum of incorporation indicates that the authorised capital is 2 000 000 shares in...

can someone help with this accounting problem? The following are the Statements of Financial Position of Kennelly plc, Heaney Ltd and Durcan Ltd at 30 September 2020 Assets Kennelly plc Heaney Ltd...

You are the financial director of WestCo Ltd, a company that is listed on the Alternative Exchange (AltX). Since listing on the exchange, the company has performed above market expectations and the...

Topic 1 Regulation & Financing Company Operations: Presentation Question At 30 June 2018, the trial balance of ABC Ltd included the following equity: Share capital (1,000,000 ordinary shares fully...

In a heat exchanger (see accompanying animation) a flow of hot air is cooled by a flow of water. Identify the interactions treating (a) The entire heat exchanger as the system (b) One of the streams...

Clair wants to lose 1 pound per week; however, she does not want to increase her physical activity level. If Clairs Basal EE is 1655 kCal and her Net exercise EE is 450 kCal per day, what would her...

The characteristic of the suture material that determines the amount of force in psi that the suture can withstand as an untied fiber before it breaks is called flexibility. tensile strength....

Nearly all the antibiotics used to stop bacterial infections are natural compounds that come from microbes themselves. For example, penicillin is derived from a fungus, while vancomycin, the...

Refer to the Scheer Industries example in Section 8.2. Use 6.84 days as a planning value for the population standard deviation. a. Assuming 95% confidence, what sample size would be required to...

Amalgamated General Corporation is a consulting firm that also offers financial services through its credit division. From time to time the company buys and sells securities. The following selected...

Materials used by the Instrument Division of T_Kong Industries are currently purchased from outside suppliers at a cost of $175 per unit. However, the same materials are available from the Components...

1. Operating and Cash Cycles What impact did this change in payables policy have on BlueSkys operating cycle? Its cash cycle? 2. Operating and Cash Cycles What impact did the announcement have on...

Name five approaches for retailers to develop a sustainable competitive advantage. Give an example of a local company that has changed their style or marketing strategy during and after the pandemic...

11.5 Describe the grievance procedure in a union environment.

11.6 Explain union decertification.

Larry Browning, Alf Saetre, Keri Stephens, and Jan-Oddvar Sornes (2008) present stories of the ways personal and social media facilitate and hinder work in a range of organizations. Their book shows...