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On July 1, 2021, Funk Company has 400,000 shares of P25 par ordinary outstanding and...

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Accounting

On July 1, 2021, Funk Company has 400,000 shares of P25 par ordinary outstanding and the market price of the stock is P50 per share. The company also has 50,000 ordinary shares in the treasury reacquired at a total cost of P1,650,000 On the same date, Funk Company declared a 1 for 5 share split. Immediately before the split, the total Share premium was P1,500,000.

If half of the treasury shares were reissued at P10 per share, the entry to record the issuance shall involve:

a. Debit to Accumulated Profits at 425,000

b. Debit to Accumulated Profits at 850,000

c. Credit to Share Premium at 850,000

d. Credit to Share Premium at 425,000

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