Question

Redeemable preference shares of Rs. 2,00,000 are redeemed at par for which purpose fresh equity shares are issued for Rs. 80,000 at 10% premium. The amount to be transferred to Capital Redemption Reserve Account would be____________.

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

Answer 1

The correct option is B Rs. 1,20,000

b'Redeemable preference shares Rs. 2,00,000

(-) Equity shares Rs. 80,000

Capital redemption reserve Rs. 1,20,000.

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