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When shares are issued at price which is more than face value then issuance of shares is called issued at premium and that excess amount above face value is called share premium.
Jordi Grant
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What is the meaning of issues of shares at premium?
When shares are issued at value which is more than face value then it is called shares issued at premium.
What is the share premium?
When shares are issued at price which is more than face value then issuance of shares is called issued at premium and that excess amount above face value is called share premium.
Why are shares issued at a premium?
Well the company wants to profit. And issuing shares at premium provides capital to the company without changing its equity capital.
When company issues shares at a premium the amount of premium may be received by the company?
yes,the company can receive the amount of premium.
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.
If forfeiture share is reissued at premium then why security premium is credited?
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
What are the uses of share premium?
Share premium is used for many purposes and 1 of them is redemption of preference shares and debentures
What is the difference between preference shares and share premium?
Preference shares are paid to shareholders before common stock dividends are paid out. Share premium can not be distributed, however, but under certain circumstances can be reduced.
What is security premium in management accounting?
Security premium in management accounting is the difference between the nominal value and the selling price of shares.
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
What Share premium?
the amount payable for a share above its nominal value. Most shares are issued at a premium to their nominal value. Share premiums are credited to the company's share premium account.
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.
