Page 20 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Unit 1: Share Capital – Issue of Shares

5 on first and final call Notes
The subscription list totalled 1,16,000 shares. Applications for 16,000 shares were rejected, all
other applications were accepted in full. Call was duly made. All moneys were received in time.
Pass the necessary journal entries for all the transactions in each one of the following cases:
Case I: Share premium is included in the application money
Case II: Share premium is included in the allotment money
Case III: Share premium is included in the call money.
Solution:
Mars Co. Ltd. Journal

Case I

Date Particulars L.F. Debit Credit
1. Bank Account Dr. 3,48,000
To Share Application Account 3,48,000
(Being application money received on 1,16,000
shares @ 3 per share including 2 per share as
premium)
2. Share Application Account Dr. 3,00,000
To Share Capital Account 1,00,000
To Share Premium Account 2,00,000
(Being application money transferred to share
capital and share premium account on 1,00,000
shares)

3. Share Allotment Account Dr. 4,00,000
To Share Capital Account 4,00,000
(Being due of allotment money on 1,00,000
share @ 4 per share)
4. Share Application Account Dr. 48,000
To Bank Account 48,000
(Being return of excess application money on
16,000 shares)
5. Bank Account Dr. 4,00,000
To Share Allotment Account 4,00,000
(Being receipt of allotment money on 1,00,000
shares)
6. Share First and Final Call Account Dr. 5,00,000
To Share Capital Account 5,00,000
(Being first and final call money due on 1,00,000
share @ 5 per share)
7. Bank Account Dr. 5,00,000
To Share First and Final all Account 5,00,000
(Being receipt of first and final call money on
1,00,000 shares)

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