Question
Company A presents the following Equity in the Statement of Financial Position on 31/06/2018: Share Capital of 40,000 shares of 2 each and share premium
Company A presents the following Equity in the Statement of Financial Position on 31/06/2018: Share Capital of 40,000 shares of 2 each and share premium of 26,000. Company A makes a 1 for 5 bonus issue capitalizing the share premium account. Considering the previous information, which of the following statements is correct?
a. The company issues 8,000 shares. Share premium decreases in 16,000 and share capital increases in the same amount
b. The company issues 8,000 shares. Share premium decreases in 16,000 and share capital decreases in the same amount.
c. None of the answers is true
d. The company issues 8,000 shares. Share premium decreases in 8,000 and share capital increases in the same amount.
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