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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...
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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.
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.
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.
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
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 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.
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.
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 shares 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.
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
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.
What is share premium reserve?
Share premium occurs when a company sells its shares at a price higher than face value, meaning it earned more money than the share is stated to be worth. This excess money is held in reserve in a share premium account, and it can be used to pay equity related expenses, such as underwriting, or to issue bonus shares to stockholders.
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 do you understand by issue of shares at premium par discount?
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.
