In the context of accounting for share capital transactions, which of the following statements is correct regarding the issue of bonus shares?
1
Bonus shares are issued at a discount to existing shareholders.
2
Bonus shares are issued out of the company's reserves or surplus.
3
Bonus shares can be issued to employees as part of their compensation.
4
Bonus shares reduce the company's share capital.
5
Bonus shares are issued to new shareholders to raise additional capital.