Journals for share buy

Journals for share buy

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Hi,

Need advice on sale of shares by a holding company.  The company structure is a holding company and a wholly owned trading susbisidary.  One of the shareholders had their shares bought by the holding company.  The Holding company has no assets apart from a bank account.  The funds to pay for these share were transferred by the trading company.  I think the correct journals are as follows:

Subsidiary

DR Share Captial 10

DR Share Premium 90

CR Bank 100

Holding company

DR Bank 100

CR Share Capital 100

Does this seem correct?  Any advice is appreciated

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By VLS
12th Mar 2012 11:59

Hi

Is trading subsidiary wholly owned by parent co? If so journal would be :

Subsidiary

Dr Intercompany loan       100

    Cr Bank                                100

Holding Co

Dr Bank                          100

   Cr Intercompany loan              100

Dr P&L account               100            for purchase of own shares fromprofits

   Cr Bank                                 100

Dr Share capital                10

Cr Capital redemption res             10

Hope this helps

Thanks (1)