Home › ACCA › Financial Accounting › Share Capital and Dividends › A corporation issues 15,000 ordinary shares of $…
A corporation issues 15,000 ordinary shares of $10 par value at $10 per share for cash. What amount is credited to the ordinary share capital account?
A$150,000
B$15,000
C$1,500
D$30,000
Answer & Solution
Correct answer: A. $150,000
1. The share capital account is credited at par value for shares issued.
2. Par value per share = $10; shares issued = 15,000.
3. $10 \times 15{,}000 = \$150{,}000$.
4. Since issue price equals par, there is no share premium; the full $150,000 goes to share capital.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §6.3 "Issuing Stock for Cash", p.246_
Related questions
A corporation begins the period with retained earnings of $60,000, earns net income of $40Which statement correctly distinguishes a stock split from a stock dividend?Following a 4-for-1 stock split on 10,000 shares with a $20 market price, what happens to A corporation has 10,000 shares outstanding at $16 par with a market price of $20, then deWhat overall effect does a stock dividend have on a corporation's equity section?What is recorded on the distribution date of a previously declared stock dividend?On declaration of a 2% stock dividend on 21,000 ordinary shares of $10 par (fair value $15A corporation declares a 2% stock dividend on 21,000 ordinary shares of $10 par value when