Timor Ltd makes a fresh issue of ordinary shares to finance the purchase of its \(£ 1\) ordinary shares, as follows:

The statement of financial position of Timor Ltd immediately before these transactions took place was as follows:

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(a) Prepare journal entries to record the above transactions.

(b) Prepare the statement of financial position of Timor Ltd after the repurchase of its shares.

(c) Comment on the permanent capital position of Timor Ltd after the repurchase of its shares.

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Shares issued (1 shares) Nominal value 75,000 Issue price 150,000 Shares purchased Nominal value of shares 150,000 Originally issued at a premium of 7,000 Premium on redemption 30,000