A capital redemption reseve will b created for $ 100,000 (200000-50000*2)
The share premium A/C will b increased by $ 55,000 (75000-20000)
Naah, the answer is $25,000.
The amount recieved from the new issues of shares is 50,000x3.50=175,000 [The full price will be taken cos we are assuming the premium was decided so that it covers the cost of the redemption.]
The remaining amount needed for the redemption to take place is 200,000-175,000. This will be taken from a reserve and transferred to the CRRF.
I will post the lot tomorrow morning. Thanks.