Whats accounting of bonus shares?

Question

Whats accounting of bonus shares?

Answer 1

no accounting entry is to be passed by receiver of bonus shares.the company issuing shares will debit amount toreserve and surplus and credit toshare capital.

Answer 2

simple if due to companies regular profit criterion its capital reserve  becomes very high and reached @ point where company gives bonus shares.

equity capital of company will increase in ratio of bonus shares.e.g- if bonus will given in1:1 ratio equity capital will be doubled.