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In the journal entry on buy-back, the Equity Share Capital A/c is debited with:
AThe market price of shares bought back
BThe buy-back price
CThe face / nominal value of shares bought back
DThe premium portion only
Answer & Solution
Correct answer: C. The face / nominal value of shares bought back
1. Step 1: Per Ch 12 illustration, "Equity Share Capital A/c Dr. 600" reflects face value of bought back shares.
2. Step 2: Premium on buy-back is debited to "Premium payable on buy-back" account separately.
3. Step 3: Hence (B).
_Source: ICAI BoS CA Inter Paper 1, Ch 12 "Buy-Back of Securities"_