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WAEC Financial Accounting 1992 Question 11

Question 11

Company Accounts

Adex Company Limited issued ordinary shares ₦1 each to the public at ₦1.20. The shares were issued at

  1. A.a discount
  2. B.a profit
  3. C.a loss
  4. D.par
  5. E.a premium.
Show the answer and explanation

Answer: E (a premium.)

Explanation

Issuing above nominal value (₦1.20 for a ₦1 share) is issuing at a premium.