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Question - At 31 March 2020, a company had 5 million 50p ordinary shares and a share premium account balance of £2.50m. In June 2020, the company issued 1 million ordinary shares for £1.20 each and issued a further 1 million in November for £1.30 each.
In January 2014 the company issued bonus shares on the basis of two bonus shares for every five ordinary shares. The bonus issue was financed from the share premium account. What would be the balance on the share premium account at 31 March 2021?
a) £1.2m
b) £2.6m
c) £3.0m
d) £4.0m
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