A public limited company passed the necessary Resolution and received sanction of the Tribunal for the reduction of its share capital by ₹ 5,00,000 for the purposes enumerated hereunder:
(a) To write-off the debit balance of Profit and Loss Account of ₹2,10,000;
(b) To reduce the value of plant and machinery by ~ 90,000 and of goodwill by ₹40,000;
(c) To reduce the value of investment to market value by writing-off ₹80,000. The reduction was made by converting 50,000 preference shares of ₹20 each fully paid to the same number of preference shares of ₹15 each fully paid, and by converting 50,000 ordinary shares of ₹20 each, ₹15 paid-up into 50,000 ordinary shares of ₹10 each fully paid. Give Journal Entries necessary in relation to the reduction of share capital and show how you would deal with the balance of the reduction of Share Capital Account.