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double entry for proposed bonus shares

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › double entry for proposed bonus shares

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  • January 28, 2016 at 9:31 am #298270
    chhantelravi
    Member
    • Topics: 1
    • Replies: 0
    • ☆

    If a company declares to issue 100 bonus shares at par value of $1, what will be its accounting entry as per IFRS? Does simply disclosing in notes to the accounts enough or is there impact in the balance sheet? If it was dividend declared, accounting entry would be :
    Dr. retained earning $100
    Cr. share capital $100

    Am I right or wrong? Get me on this and please do explain about proposed bonus shares entry and its impact?

    January 28, 2016 at 7:16 pm #298378
    P2-D2
    Keymaster
    • Topics: 4
    • Replies: 7138
    • ☆☆☆☆☆

    The entry for a bonus issue of shares is DR Share Premium CR Share Capital, using the number of shares issued at par. The entry would be recorded when the shares are issued.

    Hope this helps.

    Thanks

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