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What do you understand by issue of shares at premium par discount?
Wiki User
∙ 11y ago
If a share has a nominal face value of say $10.00 then
if issued at less than $10.00, is said to issued at a discount
If issued at $10.00, then issued at par.
If issued at more than $10.00 is issued at a premium.
Wiki User
∙ 11y ago
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Which companies issue share in discount?
Companies who are in the market from long period of time can issue shares at discount.
Why issue rights issue of shares at a discount?
when shares aree issued at a lower than the face value they are said to be issue of share at discount. the main reason behind issuing share is to attract retailer
What is the effect of a bonus issue on the share capital and share premium account?
Bonus shares increases the share capital while reduces the share premium account because amount of share premium is used to issue bonus shares.
Discount on issue of shares and debentures?
Issue of shares at discountA company may issue shares at a discount i.e at a value below its par value. The following conditions must be satisfied in connection with the issue of shares at a discount :-The shares must be of a class already issuedIssue of the shares at discount must be authorised by resolution passed in the general meeting of company and sanctioned by the company law board.The resolution must also specify the maximum rate of discount at which the shares are to be issuedNot less than one year has elapsed from the date on which the company was entitled to commence the business.The shares to be issued at discount must issued within 2 months after the date on which issue is sanctioned by the company law board or within extended as may be allowed by the Company Law Board.The discount must not exceed 10 percent unless the Company Law Board is of the opinion that the higher percentage of discount may be allowed in special circumstances of case.
What is Issue of shares at premium?
Issue of share at premium mean when the share are issue at more than the price of the face value of the share, then it is said to be issue of share at premium. mean: the face value is Rs.10 and the share issue at Rs.12, then the extra Rs.2 is known as the amount of premium...
Give few examples of Miscelleneous expense?
preliminary expenses, discount on issue of shares
Can New company issue share at discount?
Most of the time, the new companies will offer their shares at discount prices. There is no law that governs/controls the prices at which the company can offer their shares to people for sale.
Is shree premium is asset or liability?
Share premium is a liability to the company. It is used to write off preliminary expenses and is used to issue bonus shares etc.
The journal entry to issue 1000000 shares of 5 dollars par common stock for 7dollars per share on January 2nd would be?
debit cash 70000000credit shares in share capital 5000000credit premium on shares capital 2000000
What do you mean by forfeiture of shares?
A share in a company that the owner loses (forfeits) by failing to meet the purchase requirements. Requirements may include paying any allotment or call money owed, or avoiding selling or transferring shares during a restricted period. When a share is forfeited, the shareholder no longer owes any remaining balance, surrenders any potential capital gain on the shares and the shares become the property of the issuing company. The issuing company can re-issue forfeited shares at par, a premium or a discount as determined by the board of directors.
Why shares issued at premium?
In case the shares have been issued at a premium and the amount of premium has been received then at the time of forfeiture of such share (a) share premium account should be debited (b) share premium account should be credited (c) share premium account should be neither debited nor credited (d) none of these
Should the share premium be regarded as part of the paid up capital of the firm?
That part which has been paid should. Shares are sometimes issued and then called in stages; the full issue amount can be paid in installments. If shares are issued and part paid, the unpaid part is (obviously) not paid up. Perhaps the answer you are looking for is the fact it is Share Premium, rather than Nominal, makes no difference. (In fact, the premium bit is more or less meaningless. It just reconciles issuing 10p nominalm shares for (say) £1.00. They are 10p nominal shares with a 90p premium rather than £1.00 shares. If there is a subsequent rights issue at (say) £2.00 per share, each will have a £1.90 premium. The only values that really mean anything are the issue amounts of £1.00 and £2.00 (real money changes hands). The rest are paper numbers. Neither says anything about value; that is determined by demand and supply on the stock exchange.
