Frannie Plc Has Made a Rights Issue of 5 Million

question 3

Multiple Choice

Frannie Plc has made a rights issue of 5 million new ordinary shares to raise cash. Each ordinary share of the company has a par value of 20 pence and the shares were issued at a premium of 280 pence. The current share price is 500 pence. What is the correct double entry required to record this transaction in the company's books of account?

• A) Debit cash £14,000,000.
• B) Debit cash £14,000,000
• C) Debit cash £15,000,000.
• D) Debit cash £25,000,000