I have a client who recently formed a new company which doesn't have any goodwill. There are new incoming shareholders where the company would issue new shares to them by completing the SH01. My question is what could be the correct accounting entry for alloting new shares. The nominal value of the shares are £0.001 while the company issued some shares at £1 while others at £10 a share.
If the company issued 1,000 shares at £1 so total consideration is £1,000 so would this entry be correct.
DR Bank £1,000
CR Share Capital £1
CR Share Premium £999
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Seems fine.
For an additional £9 of share capital you could have avoided messing around with fractions of pence.