Y Co has issued 100 shares to its directors for services rendered during the year ended 31 December 20X5. The value of the shares at the grant date (30 November 20X5) was $5 per share. At 31 December 20X5, the shares were valued at $6 per share. The accounting entry for the issue of the shares would be:

Charge expense of $500, and increase accumulated reserves by $500

Charge expense of $600 and increase accumulated reserves by $600

Charge expense of $500 and increase equity by $500

Charge expense of $600 and increase equity by $600.

Answer rating: 100% (QA)

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