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Issued at a Discount and Redeemed at Par

To redeem 15

Question

To redeem 15% Pref. shares of Rs. 1,00,000 at 5% premium, Rs. 10,000 12%. Debentures of Rs. 100 each are issued at a discount of 10%. The amount to be transferred to Capital Redemption Reserve is _______.

A

Nil

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B

Rs.90,000

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C

Rs.91,000

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D

Rs. 1,00,000

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Solution

The correct option is D Rs. 1,00,000
The nominal value of preference shares that are to be redeemed is only transferred to capital redemption reserve account. As here the nominal value of preference shares to be redeemed is Rs 1,00,000.
So the amount to be transferred to CRR account is 1,00,0000.

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