Capital surplus: Difference between revisions

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For example, a company issues 100 ordinary shares of a nominal value of $1 each at a subscription price of $4 per share. The $300 difference will go to the share premium account.
 
At the same time, the company issues 50 8% preference shares with a par value of $0.5. These shares are bought by investors for $1 each.
 
The firm's balance sheet at this point consists of only four items: