On 1 October 2016, Chubb plc. issued 100,000 shares of 50p each at a price of £1 per share. The accounts clerk has correctly recorded the cash received, but has credited the full amount to the Share Capital account.
Which of the following entries correct the error made by the accounts clerk?

Question

On 1 October 2016, Chubb plc. issued 100,000 shares of 50p each at a price of £1 per share. The accounts clerk has correctly recorded the cash received, but has credited the full amount to the Share Capital account.

Which of the following entries correct the error made by the accounts clerk?

Answer

Debit Share Premium account £100,000; Credit Share Capital accounting £100,000

Answer

Debit Share Premium account £50,000; Credit Cash £50,000

Answer

No entries are needed because all entries are made correctly by the accounts clerk.

Answer

Debit Share Capital account £50,000; Credit Share Premium account £50,000

Crowdly

On 1 October 2016, Chubb plc. issued 100,000 shares of 50p each at a price of £1...

Want instant access to all verified answers on moodle.nottingham.ac.uk?