CONVERSION OF LOAN INTO EQUITY, Accounting - Auditing

[S.C. WADHWA]

X (A Pvt. Ltd. Company in India) purchased 500 shares @ 1 Euro each of B (A company incorporated outside India). Since B shares capital consisted of 500 shares, it became wholly owned susbsidiary of X.

X also gave loan of 700 Euro to B during financial year 2013-14 which was recoverted in indian Rs. As on 31/03/14.

Now, during financial year 2014-15, this loan is converted into 700 shares of 1 Euro each.

Please advise

What entry is to be passed

At what value, transaction to be booked

Posts / Replies

[MARIAPPAN GOVINDARAJAN]

Whether you have got clarified in the above said issue? If not please inform.