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Question

Preference shares of Rs. 2 lakhs are redeemed at par for which fresh equity shares of Rs. 80,000 are issued at 10% premium. What amount should be transferred to Capital Redemption Reserve?

A
Rs. 2,00,000
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B
Rs. 80,000
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C
Rs. 1,20,000
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D
Rs. 1,12,000
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Solution

The correct option is D Rs. 1,20,000
Preference share 2,00,000
Less- equity shares 80,000
Capital redemption reserve 1,20,000.
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