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Difference between a bonus issue and a right issues of share

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Question: CD had 5,000.00 R1 ordinary shares in issue. Subsequently, CD made a right issue of 1new ordinary share at R3. 50 per share for every 5 ordinary currently held. At the same date CD's ordinary shares were trading at R4. 75.

Required: 1.explain the difference between a bonus issue and a right issues of shares.

2. Prepare the journal entries required to record CD's rights issue in its financial records, assuming that all rights were taken up

Reference no: EM132736734

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