There are two statements marked as Assertion (A) and Reason (R). Mark your answer as per the codes provided below-
Assertion: A company can issue its share either at par, at a premium, or even at a discount in some exceptional cases like sweat equity shares.
Reasoning: Amount in excess of the nominal value of the share is termed as premium and such amount of premium is credited to Securities Premium Account or Securities premium Reserve Account.
Answer & explanation
Correct answer: option 2
A company can issue its shares either at par, at a premium or even at a discount. The shares will be at par is when the shares are sold at their nominal value. Shares sold at a premium cost more than their nominal value, and the amount in excess of the face value is the premium.
Both the statements are true but irrelevant to each other.