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In: Accounting

1.      What are share splits and what accounting entries are necessary when a share split is undertaken?...

1.      What are share splits and what accounting entries are necessary when a share split is undertaken?

2.      Are preference shares debt or equity? Briefly provide your reasoning?

3. On 1 July 2019 Campbell Ltd provided 1 million options to its chief executive officer. The options were valued at $1.20 each and allowed the chief executive officer to acquire shares in Campbell Ltd for $8.40 each. The chief executive officer is not permitted to exercise the options before 30 June 2021 but may then exercise them at any time between 1 July 2021 and 30 June 2022. The market price of the Campbell Ltd shares on 1 July 2019 was $9.75.

On 31 December 2021, the share price reaches $10.78 and the chief executive officer decides to exercise her options and acquire shares in Campbell Ltd.

Required: Account for the issue and exercise of options in Campbell Ltd

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ekkarill92 answered 1 week ago
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