50,000 equity shares of Rs. 10 each, issued at Rs. 20, for the purpose of redemption of preference share capital amounting Rs. 7,50,000. How much amount will be transferred to capital redemption reserve?

The correct answer is B.

The amount to be transferred to capital redemption reserve is the difference between the amount received from the issue of equity shares and the amount to be redeemed. In this case, the amount received from the issue of equity shares is 50,000 x Rs. 20 = Rs. 1,000,000. The amount to be redeemed is Rs. 7,50,000. Therefore, the amount to be transferred to capital redemption reserve is Rs. 1,000,000 – Rs. 7,50,000 = Rs. 2,50,000.

Option A is incorrect because it is the amount of money received from the issue of equity shares. Option C is incorrect because it is the face value of the equity shares. Option D is incorrect because it is the total amount of money to be redeemed.