During the year the company has issued additional shares in the following transa
ID: 2655770 • Letter: D
Question
During the year the company has issued additional shares in the following transactions:
1-On January 14, 2017 additional 500 ordinary shares were issued with a par value of $1 and market price of 40
2-On February 15, 2017, the Comapany issued 300 ordinary shares of $1 par value, and 500 preference shares of $1 par value when the fair value of the ordinary shares is $20 each and the fair value of the preference share is $24 each. The total sale amount of $15,000
3-On April 10, 2017 the Comapany issued 300 ordinary shares of $1 par value, and 200 preference shares of $1 par value when only the fair value of the ordinary is known and its $22. the total sale amount of $7,000.
Required:
Prepare the issuance entries for each of the above transactions (show calculation)
Explanation / Answer
JAN14,2017- Bank A/c Dr. $20000
To Share capital $500
To Share premium $19500
FEB15, 2017 - Bank A/c Dr. $15000
To Equity share capital $300
To Preference share capital $500
To share premium $14200
APR10, 2017 Bank A/c Dr. $7000
To Equity share capital $300
To Preference share capital $200
To share premium $6500
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