Practice Activity 20.6 Issue of shares by a company

Nkemdinakachukwu Electronics Plc issued 1,000,000 ordinary shares to the public at ₦1.50 each. The company does not have an obligation to repurchase or buy back the shares. Akajiaku Limited is one of the several investors who purchased the shares in Nkemdinakachukwu Electronics Plc. Akajiaku Limited purchased 200,000 ordinary shares at ₦1.50 each. Nkemdinakachukwu Electronics Plc prepares its financial statement on 31 December annually.

Required: How should Nkemdinakachukwu Electronics Plc recognise its issue of ordinary shares?

Suggested answer to practice activity 20.6