Pass necessary journal entries in the following cases :
(i) $Z$ Ltd redeemed $1500$ , $12 %$ debentures of Rs $100$ each issued at a discount of $6 %$ by converting them into equity shares of Rs $100$ each issued at a premium of Rs $25$ per share.
(ii) $X$ Ltd. converted $1, 000, 12 %$ debentures of Rs $100$ each issued at a discount of Rs $10$ per debenture into equity shares of Rs $100$ each Rs $90$ paid up.

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Solution

(i)Number of Shares to be issued $= \frac{A m o u n t P a y a b l e}{I s s u e P r i c e} = \frac{1, 41, 000}{125} = 1, 128$ shares
(ii) Number of Share to be issued $= \frac{A m o u n t P a y a b l e}{I s s u e P r i c e} = \frac{90, 000}{(100 - 10)} = \frac{90, 000}{90} = 1, 000$ shares.

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(i)Number of Shares to be issued =AmountPayableIssuePrice=1,41,000125=1,128 shares(ii) Number of Share to be issued =AmountPayableIssuePrice=90,000(100−10)=90,00090=1,000 shares.

(i)Number of Shares to be issued $= \frac{A m o u n t P a y a b l e}{I s s u e P r i c e} = \frac{1, 41, 000}{125} = 1, 128$ shares
(ii) Number of Share to be issued $= \frac{A m o u n t P a y a b l e}{I s s u e P r i c e} = \frac{90, 000}{(100 - 10)} = \frac{90, 000}{90} = 1, 000$ shares.