Answer:
Debit Cash account $50,000
Credit Ordinary share $5,000
Credit Share Premium $45,000
Explanation:
When share issued are paid for at an amount above the par or ordinary value, the excess paid is known as share premium.
The share premium like the par or ordinary value is recognized in the balance sheet as a part of the owners equity.
For a stock unit at par value of $1 for which the issue price was $10,
the share premium per unit
= $10 - $1
= $9
Ordinary share value = $1 × 5000 = $5,000
Share premium amount = $9 × 5,000 = $45,000
