Preference share

Accountancy

In book back illustration 2 Adjustment no.3 for redemption of debentures we issuing equity share For that adjustment face value of equity shares =2 then ,we are dividing by 10 in working note 2

Kanaga Mani

CA Inter

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10-May-21 18:33

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Answers (3)

Because, they are being issued at Rs. 10 [2 FV + 8 SPR]

Sahibdeep Singh

CA Inter

★ 14K+

10-May-21 18:51

Sahibdeep Singh

Because, they are being issued at Rs. 10 [2 FV + 8 SPR]

For the purpose of redemption of debentures we cannot use premium as per sec 133 we want to divide by face value only

Thread Starter

Kanaga Mani

CA Inter

★ 3K+

10-May-21 19:00

Thread Starter

Kanaga Mani

For the purpose of redemption of debentures we cannot use premium as per sec 133 we want to divide by face value only

That's a different provision - that is premium on redemption. Here it's issue of shares - Deb. holders are asked either they take cash, or take share at issue price 10. So, we are not paying them premium, infact issuing shares at premium.

Sahibdeep Singh

CA Inter

★ 14K+

10-May-21 19:12