MyQuestionIcon

1

You visited us 1 times! Enjoying our articles? Unlock Full Access!

Issued Share Capital

Premium recei...

Question

Premium received on new issue of shares cannot be used for redemption of par value of preference shares.

A

True

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

B

False

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is A True
The amount of premium received in case of issue of shares cannot be utilised for redemption of preference shares to the extent of face value of shares, rather it can be utilised for the purpose of premium, if any in case of redemption.

Suggest Corrections

thumbs-up

0

Similar questions

Q. When shares are issued at a premium for the purpose of redemption of preference shares, amount of premium can be used for redemption of par value of preference shares.

Q. S Ltd. issued

2, 000

10 %

Preference shares of Rs.

100

each at par, which are redeemable at a premium of

10 %

. For the purpose of redemption, the company issued

1, 500

Equality Shares of Rs.

100

each at a premium of

20 %

per share. At the time of redemption of Preference Shares, the amount to be transferred by the company to the Capital Redemption Reserve Account will be________.

Q. Solid ltd. issued 2,000, 10% preference shares of Rs. 100 each at par, which are redeemable at a premium of 10%. For the purpose of redemption, the company issued 1,500 equity shares of Rs. 100 each at a premium of 20% per share. At the time of redemption of preference shares, the amount to be transferred by the company to the Capital Redemption Reserve Account will be-

Q. 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?

Q. Premium on redemption of preference shares can be provided out of _________.

View More

Join BYJU'S Learning Program

similar_icon

Related Videos

lock

Issue of Shares

ACCOUNTANCY

Watch in App

explore_more_icon

Explore more

Issued Share Capital

Standard XII Accountancy

Join BYJU'S Learning Program

CrossIcon