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Zigma SAOG has issued 4 million, OMR 1 equity share. During the year 2016, the...

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Accounting

Zigma SAOG has issued 4 million, OMR 1 equity share. During the year 2016, the company decided to make a bonus issue in the ratio of 2 for 4 shares held. The following balances reserves and surplus accounts that the company had prior to the Issue of bonus shares:

Share premium OMR 1,550,000 General Reserve OMR 90,000

Retained earnings OMR 600,000 Revaluation surplus OMR 30,000

For the issue of bonus shares it is agreed to use the share premium in priority and general reserve can be used to an extent of OMR 60,000 only. Based on the above data, write the respective journal entry and show its working and the effect on items of SOFP.

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