What should be the Journal Entry?
1. Creditors shall be reduced to 50 Percent, it is to be settled by the issue of equity shares of Rs. 10 each out of shared surrendered.
Liabilities Side of B/s shows Creditors of Rs. 72000
Solution :
According to Study Material
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Creditors A/c Dr. 72000
To Reconstruction A/c 72000
Is it correct ? While the question specifically asked for 50 % reduction i.e 36000
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Please help me out....
.. When they say "such amount is to be settled" . It means they want to wave off whole amount against something. 
CAclubindia
