06 December 2013
A private limited company was incorporated 2 years back and has obtained loan during the course of business.
Now the company wants to issue shares to the two loan creditors and convert their outstanding balances to share capital. However the value per share to be issued to each will be different. For eg. creditor A has Rs.60,000 outstanding and he may be issued 6000 shares @ Rs.10 each. creditor B has Rs.50,000 outstanding and he may be issued 2500 shares @ Rs.20 each. Can this be done at once, or can there be a time gap in converting each creditor? Also where will the difference in face value be debited in the books?
CAclubindia
