A company made an issue for cash of 1,000,000 50c shares at a premium of 30c per share. Which one of the following journal entries correctly records the issue?
The answer is, B. Debit Credit $ $ Bank 800,000 Share capital 500,000 Share premium 300,000
But my answer is that Dr. bank $1,600,000, Cr Share capital $1,000,000 Share Premium $ 600,000(=30c * 20,000 shares)
I got number of shares = 1,000,000/50c = 20,000 shares.
The question says that they issued 1,000,000 shares.
(If they had issued shares with a total nominal value of $1,000,000, then they would have issued 2,000,000 shares of 50c, but that is not what the question says 🙂 )