Motion Plc Issued €5 Million in Redeemable Preference Shares in a Private

Motion Plc issued €5 million in redeemable preference shares in a private placement on 1 July 2012.The shares are redeemable on 30 June 2016,have no voting rights and offer a fixed rate of return to the holder.The shares are redeemed as expected with a fresh issue of shares.What are the accounting entries and note disclosures to record the transactions on 1 July 2012 and 30 June 2016?

A) $\text { 1 July 2012: }$
$\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Bank trust } & 5000000 & \\\hline \mathrm{Cr} & \text { Share capital-preference shares } & & 5000000 \\\hline & & & \\\hline\end{array}$

$30 \text { June 2016: }$
$\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Share capital-preference shares } & 5000000 & \\\hline \mathrm{Cr} & \text { Cash at bank } & & 5000000 \\\hline\end{array}$ Note disclosure: redeemable preference shares have characteristics different to ordinary shares and so have been disclosed separately in the shareholders' funds section of the statement of financial position.
B) $\text { July 2012: }$
$\begin{array}{|c|l|r|r|}\hline \mathrm{Dr} & \text { Application } & 5000000 & \\\hline \mathrm{Cr} & \text { Share capital-preference shares } & & 5000000 \\\hline & & & \\\hline \mathrm{Dr} & \text { Cash at bank } & 5000000 & \\\hline \mathrm{Cr} & \text { Application } & & 5000000 \\\hline\end{array}$

$30 \text { June 2016: }$
$\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Share capital-preference shares } & 5000000 & \\\hline \mathrm{Cr} & \text { Share capital } & & 5000000 \\\hline\end{array}$ Note disclosure: redeemable preference shares have characteristics different to ordinary shares and so have been disclosed separately in the shareholders' funds section of the statement of financial position.
C) $\text { I July 2012: }$
$\begin{array}{|l|l|r|l|}\hline \mathrm{Dr} & \text { Cash at bank } & 5000000 & \\\hline \mathrm{Cr} & \text { Share capital-preference shares } & & 5000000 \\\hline & & & \\\hline\end{array}$

$30 \text { June 2016: }$
$\begin{array}{|c|l|r|r|}\hline \mathrm{Dr} & \text { Share capital-preference shares } & 5000000 & \\\hline \mathrm{Cr} & \text { Cash at bank } & & 5000000 \\\hline & & & \\\hline \mathrm{Dr} & \text { Cash } & 5000000 & \\\hline \mathrm{Cr} & \text { Share capital } & & 5000000 \\\hline\end{array}$ Note disclosure: redeemable preference shares have the characteristics of debt and so have been classified as liabilities in the statement of financial position.
D) $\text { 1 July 2012: }$
$\begin{array}{|c|l|r|r|}\hline \mathrm{Dr} & \text { Cash at bank } & 5000000 & \\\hline \mathrm{Cr} & \text { Share capital-preference shares } & & 5000000 \\\hline & & & \\\hline\end{array}$

$30 \text { June 2016: }$
$\begin{array}{|l|l|r|r|}\hline \mathrm{Dr} & \text { Share capital-preference shares } & 5000000 & \\\hline \mathrm{Cr} & \text { Capital redemption reserve } & & 5000000 \\\hline & & & \\\hline \mathrm{Dr} & \text { Capital redemption reserve } & 5000000 & \\\hline \mathrm{Cr} & \text { Cash at bank } & & 5000000 \\\hline\end{array}$ Note disclosure: redeemable preference shares are to be redeemed on 30 June 2008.