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Solution Question 6:: Issuance of OSC Debit (RM) Credit (RM)

The document provides journal entries for: 1) The issuance of 100 million ordinary shares at RM3 each through a rights issue, raising RM300 million. 2) The issuance of 20 million preference shares at RM0.80 each, raising RM16 million. 3) The issuance of bonus shares by capitalizing retained profits, increasing ordinary share capital by RM20 million. 4) The issuance of RM1.83 million 10% debentures at a discount, with associated interest expense entries.

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Syaza Aisyah
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357 views2 pages

Solution Question 6:: Issuance of OSC Debit (RM) Credit (RM)

The document provides journal entries for: 1) The issuance of 100 million ordinary shares at RM3 each through a rights issue, raising RM300 million. 2) The issuance of 20 million preference shares at RM0.80 each, raising RM16 million. 3) The issuance of bonus shares by capitalizing retained profits, increasing ordinary share capital by RM20 million. 4) The issuance of RM1.83 million 10% debentures at a discount, with associated interest expense entries.

Uploaded by

Syaza Aisyah
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd

Solution Question 6:

Journal entries

Issuance of OSC
Debit Credit
(RM) (RM)
i Dr Bank (100,000,000 x RM3) 300,000,000
Cr Ordinary Shares Application 300,000,000

ii Dr Ordinary Shares Application 60,000,000


Cr Bank (20,000,000 x RM3) 60,000,000

iii Dr Ordinary Shares Application 240,000,000


Cr Ordinary Share Capital (80,000,000 x RM3) 240,000,000

Issuance of 6% PSC
Debit Credit
(RM) (RM)
i Dr Bank (20,000,000 x RM0.80) 16,000,000
Cr 6% Preference Shares Application 16,000,000

ii Dr 6% Preference Shares Application 16,000,000


Cr 6% Preference Shares Capital 16,000,000

Issuance of bonus shares


Debit Credit
(RM) (RM)
i Dr Retained Profit (1/5 x 50,000,000 x RM2) 20,000,000
Cr Bonus Issue 20,000,000

ii Dr Bonus Issue 20,000,000


Cr Ordinary Shares Capital 20,000,000
Issuance of debentures
Debit Credit
(RM) (RM)
i Dr Bank (RM2,000,000 x 0.95) – RM70,000 1,830,000
Cr 10% Debentures 1,830,000

ii Dr Finance Cost (12% x RM1,830,000) x 5/12 91,500


Cr Bank (10% x 2,000,000) x 5/12 83,333
Cr 10% Debentures (RM91,500 – RM41,667) 8,167

iii Dr Retained Profit 91,500


Cr Finance Cost 91,500

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