Given below are two statements, one labelled as Assertion (A) and the other labelled as Reason (R).
Assertion (A): X Ltd. forfeited 2,000 equity shares of Rs 10 each on which it had received Rs 10,000. The company can reissue these forfeited shares at Rs 4 per share.
Reason (R): Forfeited shares cannot be issued at discount more than the amount received on these shares.
In the context of the above statements, which one of the following is correct?
1
Both Assertion (A) and Reason (R) are true, and Reason (R) is the correct explanation of Assertion (A).
2
Both Assertion (A) and Reason (R) are true, but Reason (R) is not the correct explanation of Assertion (A).
3
Assertion (A) is true, but Reason (R) is false.
4
Assertion (A) is false but Reason (R) is true.