Question: ANSWER ONLY. SUBTLE DELICATE Co. issues 10,000 stock rights to shareholders which entitle them to purchase one ordinary share with par value of P400 for

ANSWER ONLY.

SUBTLE DELICATE Co. issues 10,000 stock rights to shareholders which entitle them to purchase one ordinary share with par value of P400 for each stock right held at a subscription price of P480. The fair value per share is P600.

1. The entry to initially recognize the stock rights issued includes a?

a.debit to share premium

b.credit to share premium

c.credit to retained earnings

d.none of these

2. Subsequently, half of the stock rights issued were exercised. The entry to record the transaction includes a?

a.credit to share capital for P2,400,000

b.credit to retained earnings for P400,000

c.credit to share premium for P400,000

d.none of these

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