The balance sheet of PQ Ltd. on 31^st December 1985 is as under:

The preference shares are to be redeemed at 10% premium along with dividend due for 1985. The company issued 45,000 equity shares of ₹10 each, at a premium of ₹5 per share. All shares were subscribed and cash was duly received. The investments were sold for ₹3,50,000. Payment was made to the preference shareholders and thereafter, the directors decided to issue bonus shares in the ratio of one share for every four shares held. For this purpose, the free reserve were utilised to the minimum extent necessary. Give journal entries with narrations and the balance sheet after redemption.  

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Liabilities 9,000 8% Redeemable Preference Shares of 100 each, fully paid Equity Shares of ₹10 each, fully paid General Reserve Securities Premium Profit & Loss A/c Creditors 9,00,000 9,00,000 3,60,000 27,000 5,40,000 1,23,000 28,50,000 Assets Fixed Assets Current Assets Investment Bank 20,00,000 3,80,000 2,70,000 2,00,000 28,50,000