Accounting 9706 · AS & A Level · The accounting system

The accounting system — practice question

The directors of a limited company have recently carried out a rights issue of one ordinary share for every three already held, at a premium of $0.50$ per share. All of the rights issue was taken up. After the rights issue, the statement of financial position showed the following figures. Issued share capital (shares of $1$ each): $1200000$ Share premium: $300000$ What amount was entered on the debit side of the company’s bank account when the rights issue was made?

  • A$300000
  • B$400000
  • C$450000
  • D$600000

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