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22 (2) Upon issue of share - Debit Bonus to Shareholders Account Credit Share Capital Account If partly paid shares are to be made fully
22 (2) Upon issue of share - Debit Bonus to Shareholders Account Credit Share Capital Account If partly paid shares are to be made fully paid by way of bonus, entry No. (2) will be split into two entries : (a) Debit Call Account and Credit Share Capital Account, and (b) Debit Bonus to Shareholders Account and Credit Call Account. Illustration 4 Following is the extract of the Balance Sheet of Solid Ltd. as at 31st March, 2006: Rs. Authorised capital 10,000 12% Preference shares of Rs. 10 each 1,00,000 1,00,000 Equity shares of Rs. 10 each 10,00,000 11,00,000 Issued and Subscribed capital: 12% Preference shares of Rs. 10 each fully paid 80,000 90,000 Equity shares of Rs. 10 each, Rs. 8 paid up 7,20,000 Reserves and Surplus: General reserve 1,20,000 Capital reserve 75,000 Securities premium 25,000 Profit and Loss Account 2,00,000 Secured Loan: 12% Partly Convertible Debentures @ Rs. 100 each 5,00,000 On 1st April, 2006 the Company has made final call @ Rs. 2 each on 90,000 equity shares. The call money was received by 20th April, 2006. Thereafter the company decided to capitalise its reserves by way of bonus at the rate of one share for every four shares held. Share premium of Rs. 25,000 includes a premium of Rs. 5,000 for shares issued to vendors pursuant to a scheme of amalgamation. Capital reserves include Rs. 40,000, being profit on sale of plant and machinery. 20% of 12% debentures are convertible into equity shares of Rs. 10 each fully paid on 1st July, 2006. 8,000 Show necessary entries in the books of the company and prepare ine extract of the Balance Sheet immediately after bonus issue but before conversion of debentures. Are the convertible debentureholders entitled to bonus shares
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