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How does a share premium account appear on a balance sheet?

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posted Jun 15 by Shubham Rajput

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Share premium account shows up in the shareholders’ equity portion of the balance sheet.
The share premium account represents the difference between the par value and issue price. For example, say a company issued 1,000 shares at ₹10 par value per share. The company actually received ₹15 per share as the subscription price. The difference between the par value and the subscription amount is the share premium. Thus, the additional ₹5,000 is placed in the share premium account.
The company may use share premium for following purposes
1.Bonus shares
2.Writing off : Writing off expenses of "commission paid,discount allowed and preliminary expenses"
3.Buy-back : Purchasing its own shares

answer Jun 15 by Sumeet Vyas
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