At 1 January 2006, a company’s capital structure was as follows:
                                                                                         $
       Ordinary share capital
                 2,000,000 shares of 50c each                  1,000,000
                 Share premium account                            1,400,000
In January 2006 the company issued 1,000,000 shares at $1·40 each.
In September 2006 the company made a bonus issue of 1 share for every 3 held using the share premium account.
What were the balances on the company’s share capital and share premium accounts after these transactions?
                     Share capital                       Share premium
                                $                                          $
A                         4,000,000                            800,000
B                         3,200,000                             600,000
C                         2,000,000                          1,800,000
D                         2,000,000                          1,300,000

C     Share capital       Share premium
                        1,000,000            1,400,000
            Issue       500,000              900,000
                        –––––––––– ––––––––––
                        1,500,000            2,300,000
            Bonus     500,000             (500,000)
                       –––––––––– ––––––––––
                       2,000,000             1,800,000
                      –––––––––– ––––––––––