Statement of Cash flows

In the situation of a bonus issue, no cash changes hands The double entry is: Dr Share Premium Account (in this case. Beware, it isn't always funded from the Share Premium Account - it could be from a Capital Redemption Reserve or General Reserve or even Retained Earnings. But it's most commonly from Share Premium) Cr Share Capital Account This is what has happened in the question Dr Share Premium (thus eliminating it) $3,000 Cr Share Capital $3,000 Then a new issue is made at par (not "at part" as you have written) This is an issue of new shares at their face value (par) and the double entry here will be: Dr Cash $1,000 Cr Share Capital $1,000 IF these new shares had been issued at a premium of, say 40 cents, so the price for an individual share would have been $1.40, then the entry would have been: Dr Cash $1,400 Cr Share Capital $1,000 Cr Share Premium $ 400 Is that OK?

Many thanks for the speedy answer! :) When you wrote: This is an issue of new shares at their face value (par) and the double entry here will be: Dr Cash $1,000 Cr Share Capital $3,000. You meant: Cr Share Capital $1,000, not $3,000, right? Does this mean that on the Cash flow statement under Cash from Financing activities, I have: Proceeds from the issue of shares: $1,000, right?

I've corrected my careless $3,000! Yes, cash from financing activities is $1,000 inflow

Great! Many, many, many thanks, Mike!!!!!!!! :)

You're very, very, very welcome Thomas! Or should that be Rebecca? :-)

hahaha, Rebecca :) Thomas is my last name :)

Well, there's a thing! Mind you, I've never heard of Rebecca as a family name so I should have guessed :-)