You asked: What do you mean by issue of shares at par at premium and at discount?

When a company issues a new bond, if it receives the face value of the security the bond is said to have been issued at par. If the issuer receives less than the face value for the security, it is issued at a discount. If the issuer receives more than the face value for the security, it is issued at a premium.

What do you mean by issue of shares at par premium and discount?

When shares are issued at a price equal to their face value it is termed as shares issued at par. When issue price of a share is more than its face value, it is known as shares issued at a premium. If issue price of a share is less than its face value, it is called as shares issued at a discount.

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What do you mean by issue of shares at discount?

The issue of shares at a discount means the issue of the shares at a price less than the face value of the share. For example, if a company issues share of Rs. 100 at Rs. 90, then Rs. 10 (i.e. Rs 100—90) is the amount of discount.

What does it mean to issue shares at a premium?

That part of shareholders’ funds (shown separately on the balance sheet) formed of the premium paid for new shares above their nominal value. It is a statutory reserve which forms part of a company’s non-distributable reserves. … Used to pay up new shares to be allotted to members as fully paid bonus shares.

What is issue of par?

When a company issues a new bond, if it receives the face value of the security the bond is said to have been issued at par. If the issuer receives less than the face value for the security, it is issued at a discount.

Which type of capital is issued at par value?

The total value of the shares a company elects to sell to investors is called its issued share capital. The par value of the issued share capital cannot exceed the value of the authorized share capital.

What is premium issue?

The issue of shares at premium refers to the issue of shares at a price higher than the face value of the share. In other words, the premium is the amount over and above the face value of a share. … For example, if a company issues a share of nominal or face value of ₹10 at ₹11, it issues it at 10% premium.

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When can shares be issued at a discount?

(iv) the shares to be issued at a discount are issued within two months after the date on which the issue is sanctioned by the 3 Company Law Board] or within such extended time as the 3 Company Law Board] may allow.

When a company issues shares at a premium the amount of premium should be received by the company?

Therefore, When a company issues shares at a premium, the premium amount will be received by it along with application money, allotment money, or calls.

What is par value of shares?

Par value is the value of a single common share as set by a corporation’s charter. It is not typically related to the actual value of the shares. … Any stock certificate issued for shares purchased shows the par value. When authorizing shares, a company can choose to assign a par value or not.

What does it mean when shares are issued?

Issued shares are those that the owners have decided to sell in exchange for cash, which may be less than the number of shares actually authorized. Shares issued generate the assets or other value given for founding a company or growing it later on.

When shares are issued at premium premium amount may be Utilised for?

The funds in the share premium account cannot be distributed as dividends and may only be used for purposes outlined in the company’s bylaws or other governing documents. Often, the share premium can be used to pay the expenses of issuing equity, such as underwriter fees or for issuing bonus shares to shareholders.

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Which of the below is issued at discount and redeemed at par?

In this case debentures are issued at discount but redeemable at par. This means that the company will get less than the face value but will redeem full face value. For example, the face value of debenture is Rs. 100 and the discount is 10%.

When shares are issued at premium Which of the following account is credited?

The profit earned from the issuance of shares at premium is called as capital profit and is credited to a separate account which is known as the Securities Premium Account.