Help with Double Entry - Debt for Equity

Help with Double Entry - Debt for Equity

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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

Replies (2)

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By johngroganjga
14th Dec 2014 08:26

Yes that's right.

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By davidmjones1
14th Dec 2014 13:24

Thank you John :-)

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