Question

Issue Of Shares At Par, At Premium And At Discount.
explain this with example
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Answer 1

Answer:

A company can issue its shares either at par, at a premium or even at a discount. The shares will be at par is when the shares are sold at their nominal value. Shares sold at a premium cost more than their nominal value, and the amount in excess of the face value is the premium. And of course, shares sold at discount cost less than the face/nominal value.

Issuing of Share at Par

Bank A/c. Dr. xxx

To Share Application A/c xxx

(Being share application amount received for ___ shares @ Rs ___ per share)

Answer 2

The answer is explained below. Hope this will help you.

Explanation:

The company has an option to issue share at par , premium or at discount.

When a company issue share at their face value it is called issue at par. When it issues at more than the face value it is called issue at premium. When it issues the value less than the face value it is issuing at discount.

For example:

Suppose the face value of a share is rs 100

• If a company issue at rs 100 only then it is issuing its share at par.
• If a company issue at more than rs 100 such as 110 , it is issuing at premium.
• If a company issue at any value less than rs 100 such as 90, then it is issuing at discount.