If Vickers Company issues 5,000 ordinary shares with a $5 par value for $175,000,

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Quizplus · Accepted Answer

The par value of the shares issued is $5, and the total amount received for the shares is $175,000, which is greater than the total par value of the shares ($5 x 5,000 = $25,000). This means that there is a share premium, which is the excess amount received above the par value. Therefore, Share Capital-Ordinary will be credited for $25,000 (5,000 shares x $5 par value), and Share Premium-Ordinary will be credited for the remaining $150,000 ($175,000 - $25,000). Cash will be debited for $175,000.

If Vickers Company Issues 5,000 Ordinary Shares with a $5