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Cash 15,000 Share Capital-Ordinary 5,000 Share Premium-Ordinary 10,000 LO 3 Explain the accounting procedures for issuing shares.Ĩ Equity Shares Issued with Other Securities If a company issued 1,000 of the shares with a €5 stated value at €15 per share for cash, it makes the following entry. Cash 5,000 Share Capital-Ordinary 5,000 LO 3 Explain the accounting procedures for issuing shares.ħ Equity Illustration: Some countries require that no-par shares have a stated value. If Video Electronics issues 500 shares for cash at €10 per share, it makes the following entry. LO 3 Explain the accounting procedures for issuing shares.Ħ Equity Illustration: Video Electronics Corporation is organized with 10,000 ordinary shares authorized without par value. Avoids confusion over recording par value versus fair market value. Share Premium LO 3 Explain the accounting procedures for issuing shares.ĥ Equity No-Par Shares Reasons for issuance:Īvoids contingent liability. Corporations maintain accounts for: Preference Shares or Ordinary Shares. Low par values help companies avoid a contingent liability. LO 3 Explain the accounting procedures for issuing shares. Shares issued in combination with other securities. Shares authorized - Shares sold - Shares issued Accounting problems: Par value shares. Ordinary Shares Account Contributed Capital Share Premium Account Preference Shares Account Two Primary Sources of Equity Retained Earnings Account Assets – Liabilities = Equity Less: Treasury Shares Account LO 2 Identify the key components of equity. Presentation on theme: "C H A P T E R 15 EQUITY Intermediate Accounting IFRS Edition"- Presentation transcript:ġ C H A P T E R 15 EQUITY Intermediate Accounting IFRS EditionĢ Two Primary Sources of Equity Assets – Liabilities = Equity