Innovate Software Ltd was incorporated with 10,000 ordinary shares of £1 nominal value each. The company has been trading successfully for three years. A venture capital firm has agreed to invest £500,000 in exchange for 10,000 new shares. The company's accountant is preparing the entries for the share capital accounts and asks for guidance on how to record this transaction.
How should the £500,000 investment be allocated between share capital and share premium accounts?