Prepare the accounting entries

Topic: Share issuance in cash Level of difficulty: Moderate Copland has a capital of 300,000 CU, divided into 3,000 shares each with a par of 100 CU. It issues 1,000 new shares (par 100) for a price of 170 each. The legislation of the country in which Copland operates requires that the full share premium (here 70 CU per share) be paid up at the time of the new shares subscription, but only requires that a minimum of 25 percent of the par value be paid up. The share issuance costs pertaining to this issuance (legal fees, auditors fees, printing costs, financial commissions and sundry fees) are offset against share premium. All providers, whose bills are summed up under issuance costs for an amount of 5,000 CU, have been paid immediately by check.


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1 Prepare the accounting entries necessary to record this capital increase.

2 Prepare a comparison of the relevant excerpts of the balance sheet before and after the issuance of new shares.

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