Question
ILLUSTRATION 25. Mook Ltd. has $. 11,20,000 in Equity Share Capital consisting of 80,000 shares of $. 10 each fully paid and 40,000 shares of
ILLUSTRATION 25. Mook Ltd. has $. 11,20,000 in Equity Share Capital consisting of 80,000 shares of $. 10 each fully paid and 40,000 shares of $. 10 each, of which $ 8 paid per share paid. It has $ 40,000 in Capital Reserve,$. 40,000 in Securities Premium Account, $ 1,40,000 in Capital Redemption Reserve Account and $ 3,00,000 in General Reserve.
By way of bonus dividend the partly paid up shares are converted into fully paid up shares and the holders of fully paid up shares are also allotted fully paid up bonus shares in the same ratio. Pass journal entries showing separately the two types of bonus issues as mentioned above with the minimum reduction in free reserves.
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