- This topic has 1 reply, 2 voices, and was last updated 6 years ago by .
Viewing 2 posts - 1 through 2 (of 2 total)
Viewing 2 posts - 1 through 2 (of 2 total)
- The topic ‘Redeemable preference shares issued at a premium’ is closed to new replies.
OpenTuition recommends the new interactive BPP books for June 2024 exams, Get your discount code >>
Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Redeemable preference shares issued at a premium
A redeemable preference share is issued at a premium. The redeemable preference is to be classified as a liability. Is the full amount of the redeemable preference shares (par + premium) be classified as liability or only the par value is classified as liability while the premium is classified as equity?
If the share is issued at a premium and only the nominal value is repayable on redemption date, the journal entry to record the issue would be:
Dr Cash $105 (assuming $5 premium)
Cr Preference Shares account $100
Cr Share Premium account $5
OK?