James Corporation issued 3,000 preference shares with a par value of CHF100 for CHF205 per share. The entry to record this transaction includes a credit to Share Premium-Preference for

Question

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The total amount received from issuing the 3,000 preference shares is:
3,000 shares x CHF205 per share = CHF615,000
The par value of the shares is:
3,000 shares x CHF100 par value per share = CHF300,000
Therefore, the share premium is the difference between the total amount received and the par value:
CHF615,000 - CHF300,000 = CHF315,000
Therefore, the entry to record this transaction would be:
DR Cash: CHF615,000
CR Preference Shares (par value): CHF300,000
CR Share Premium-Preference: CHF315,000

James Corporation Issued 3,000 Preference Shares with a Par Value