01 April 2010
Hi Abhishek, what i understand here is that creditors waive 30% of their claims (i.e.30% of Rs. 1,80,000 i.e. Rs. 54,000)in exchange of there getting shares worth Rs. 30,000 in the co. Hence it is profit for the co. and the entry will be : Creditors A/c Dr. 54,000 To Equity Share Capital A/c 30,000 To Capital Reduction A/c 24,000 Regards, CA Shakuntala Chhangani
01 April 2010
Mr Abhishek u have disclosed only a part of the reconstruction scheme what is the effect on capital reduction is not known Normally any reconstruction scheme involves sacrifice by all stakeholders of the company and the net figure is reflected in the Capital Reduction A/c of the Co.The entry suggested by Ms Shakutala is correct in the limited info given.
CAclubindia
