Rights issues are made at a discount to the current market price of the shares but at a premium to the par value of the shares issued. Which one of the following represents the correct double entry to record a rights issue of shares?

Question

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Rights issue is a type of share issue where existing shareholders are given the right to purchase additional shares at a discount to the current market price. The proceeds from the rights issue are recorded as cash in the balance sheet.

Rights Issues Are Made at a Discount to the Current