Vivacious Company issued rights to subscribe to its share capital, the ownership of 4 shares entitling...

 

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Vivacious Company issued rights to subscribe to its share capital, the ownership of 4 shares entitling the shareholders to subscribe for 1 share at par, P100. The investor owned 25,000 shares with total cost of P2,100,000. The share rights are accounted for separately. Required: 1. Assuming the share is quoted at P125 right-on, prepare journal entries to record receipt of rights and the subsequent exercise of the rights. 2. Assuming the share is quoted at P125 ex-right, prepare journal entries to record receipt of rights and the subsequent exercise of rights. Vivacious Company issued rights to subscribe to its share capital, the ownership of 4 shares entitling the shareholders to subscribe for 1 share at par, P100. The investor owned 25,000 shares with total cost of P2,100,000. The share rights are accounted for separately. Required: 1. Assuming the share is quoted at P125 right-on, prepare journal entries to record receipt of rights and the subsequent exercise of the rights. 2. Assuming the share is quoted at P125 ex-right, prepare journal entries to record receipt of rights and the subsequent exercise of rights.

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Solution when MV of the share of P125 is righton Value of one right 1251... View the full answer