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On 1 st January, 2014, a company issued 10,000 8% debentures of sh.100 at par, convertible after 6 months to sh. 10 ordinary shares at
On 1st January, 2014, a company issued 10,000 8% debentures of sh.100 at par, convertible after 6 months to sh. 10 ordinary shares at par. All the holders exercised their option at six months. The authorized capital was sh. 2,000,000 of which sh. 1,000,000 had already been issued.
Required:
- Show the necessary journal entries to effect all the transactions, application, allotment and conversion of debentures to shares. (5 marks)
- Make out ledger entries as per the transactions recorded. (5 marks)
- The balance sheet before and after the transactions. (5 marks)
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