The draft balance sheet of Telin plc at 30 September 20X5 was as follows:

Preference shares of the company were originally issued at a premium of 2p per share.The directors of the company decided to redeem these shares at the end of October 20X5 at a premium of 5p per share.They also decided to write off the balances on development costs and discount on debentures (see below).
All write-offs and other transactions are to be entered into the accounts according to the provisions of the Companies Acts and in a manner financially advantageous to the company and to its shareholders.
The following transactions took place during October 20X5:

(a) On 4 October the company issued for cash 2,400,000 10% debentures of £I each at a discount of 21⁄2%.

(b) On 6 October the balances on development costs and discount of debentures were written off.

(c) On 12 October the company issued for cash 6,000,000 ordinar y shares at a premium of 10p per share.This was a specific issue to help redeem preference shares.

(d) On 29 October the company redeemed the 12% preference shares at a premium of 5p per share and included in the payments to shareholders one month’s dividend for October.

(e) On 30 October the company made a bonus issue, to all ordinar y shareholders, of one fully paid ordinar y share for ever y 20 shares held.
(f ) During October the company made a net profit of £275,000 from its normal trading operations.
This was reflected in the cash balance at the end of the month.
Required:

(a) Write up the ledger accounts of Telin plc to record the transactions for October 20X5.

(b) Prepare the company’s balance sheet as at 31 October 20X5.

(c) Briefly explain accounting entries which arise as a result of redemption of preference shares.

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000 000 Ordinary shares of l each, fully paid 12,000 Product development costs 1,400 129% preference shares of 1 each, fully paid 8,000 Sundry assets 32,170 Share premium 4,000 Cash and bank 5,450 Retained (distributable) profits 4,600 Payables 10,420 39,020 39,020