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A corporation issues 15,000 ordinary shares of $10 par value at $12 per share for cash. What amount is credited to the share premium (paid-in capital in excess of par) account?
A$30,000
B$180,000
C$150,000
D$24,000
Answer & Solution
Correct answer: A. $30,000
1. Share capital is credited only at par: $10 \times 15{,}000 = \$150{,}000$.
2. Cash received = $12 \times 15{,}000 = \$180{,}000$ (this is option B, the total, not the premium).
3. The premium per share = issue price − par = $12 − $10 = \$2$.
4. Share premium = $2 \times 15{,}000 = \$30{,}000$.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §6.3 "Issuing Stock for Cash", p.247_
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