Question

Shares are issued at par premium or discount when do you understand by this what accounting record is made is this connection?

Answer 1

first of all Shares are never issued in discount except in forfeiture of share - company gave little discount but the term used there is " share forfeiture"

Now When share are issued at premium then entry will be-----

If there is premium in Application then
1> Bank AC Dr
To share application AC
(total amount= application+ premium)

And If the premium is present other than application time(or first installment) for ex... premium in allotment , entry will be-----

(Total money). share allotment Ac Dr
(actual installment money).To share capital
(only premium money). To security premium reserve A/c

BANK A/c. Dr
To share allotment