Concept:When the market price of a share is higher than its nominal (par) value, the share is sold at a premium.
Explanation:The par value of the share is
#0.75K.
The quoted market price is
#1.25K per share.
To decide, compare the quoted price with the par value.
#1.25K is greater than
#0.75K.
Therefore, the share is being sold above its original value.
The extra amount received above the par value is called a share premium.
The share premium equals
#1.25K−#0.75K=#0.50K.
These shares were not sold at par value.
No gain or loss is recorded by the company in this context.
The correct classification for selling above par value is at a premium.
Answer:B. premium