Well the company wants to profit. And issuing shares at premium provides capital to the company without changing its equity capital.
When shares are issued at value which is more than face value then it is called shares issued at 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.
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
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.
types of bonus shares
When shares are issued at value which is more than face value then it is called shares issued at 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.
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.
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
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.
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
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.
This is done, usually, only by the company that issued the shares.
Bonds issued at a premium always have
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
Issued Shares Authorized Shares = Issued Shares (sold to investors) + Unissued Shares Issued Shares = Outstanding Stock (held by investors) + Treasury Stock (stock bought back by company)
A share can be defined as an asset that belongs to an individual or a group of people. The various types of shares that can be issued by a company are Authorized and issued shares. Authorized shares are the ones that a company is allowed to issue while issued shares are the shares that are allocated to shareholders.