Problem 3 (Share Split and Recapitalization)

On August 4, the capital accounts of Carter Inc. are as follows:

Ordinary Share Capital, P 25 par, 40,000 shares P 1,000,000

Ordinary Share Premium 200,000

Instruction:

Prepare the necessary journal entry to record each of the following independent transactions:

A share split of 5 for 1.

A share split of 2 for 4.

One new ordinary share with a par value of P 15 is issued in exchange for one ordinary shares with a par value of P 25.

One new ordinary share with a stated value of P 12 is issued in exchange for one ordinary shares with a par value of P 25.