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

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    Syaza Aisyah
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    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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    FAR160 - GROUP 6 (NEW).docx

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    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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    194 views2 pages

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

    Uploaded by

    Syaza Aisyah
    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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    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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