If share is issued by a corporation at a price lower than par value, the difference represents a loss in the period in which the shares are issued.

Question

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If a share is issued at a price lower than par value, the difference is credited to a separate account called "discount on issuance of shares" rather than recognized as a loss. This account is gradually amortized over the life of the shares, reducing the value of the related equity account.

If Share Is Issued by a Corporation at a Price