Hi,
Our company has done a debt for equity swap (We have no tax liability on the debt swapped). We swapped £10,000 in debt that we owed for one share in our company with a nominal 1p value. What should the double entry be? I was thinking:
Debit loan account on b/s £10,000
Credit Share capital on b/s £0.01
Credit Share Premium on b/s £9,999.99
If I make these entries nothing would go to the P&L. Does this seem right?
Many Thanks