The balance sheet of Suraj Ltd., as on 31^st December 2011, was as under.

The company passed the following resolutions on 1st January 2012. 

(a). To redeem the entire preference share capital at a premium of 10%. 

(b). To issue 2,000 equity shares of ₹10 each, at a premium of ₹2 per share, which have been fully subscribed. 

(c). To sell the investment at ₹15,000. 

(d). To issue the bonus shares as fully paid in the ratio of 2:1 to the existing shareholders, including the fresh issue.

Draft the journal entries and prepare the balance sheet, as on 1^st January 2012. 

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Liabilities 5,000 6% Redeemable Preference Shares of 10 each, fully paid 6,000 Equity Shares of ₹10 each fully paid General Reserve Securities Premium Profit & Loss A/c Creditors 50,000 60,000 40,000 20,000 5,000 25,000 2,00,000 Assets Fixed Assets Current Assets Investment Bank (3³) 1,00,000 62,000 20,000 18,000 2,00,000