BPL Ltd. converted $500$ , $9 %$ debentures of $R s .100$ each issued at a discount of $6 %$ into equity shares of $R s .100$ each issued at a premium of $R s . 25$ per share. Discount on issue of $9 %$ debentures has not yet been written off. Showing your working notes clearly, pass necessary journal entries for conversion of $9 %$ debentures into equity shares.

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Solution

Working notes:
No. of Equity Shares $= \frac{A m o u n t p a y a b l e}{I s s u e P r i c e}$

$= \frac{40, 000}{125} = 400$

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Working notes: No. of Equity Shares =Amount payableIssue Price =40,000125=400

Working notes:
No. of Equity Shares $= \frac{A m o u n t p a y a b l e}{I s s u e P r i c e}$

$= \frac{40, 000}{125} = 400$