At 31 December 20X4 a company’s capital structure was as follows:
| $ | | Ordinary share capital | 125,000 | | (500,000 shares of 25c each) | | | Share premium account | 100,000 |
In the year ended 31 December 20X5 the company made a rights issue of 1 share for every 2 held at $1 per share and this was taken up in full. Later in the year the company made a bonus issue of 1 share for every 5 held, using the share premium account for the purpose.
What was the company’s capital structure at 31 December 20X5?
Ordinary share capital Share premium account
A. $450,000 $25,000
B. $225,000 $250,000
C. $225,000 $325,000
D. $212,500 $262,500
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