Page 24 - DCOM201_ACCOUNTING_FOR_COMPANIES_I

Unit 1: Share Capital – Issue of Shares

Applications were received for 1,50,000 shares. The board of directors made pro-rata allotment Notes
to the applicants for 1,20,000 shares. A shareholder Akash could not pay the allotment money on
200 shares, while another shareholder Mukesh did not pay the final call on 120 shares. Pass
necessary journal entries to record the above transactions.
Solution:

Fine Limited Journal
Date Particulars L.F.
1. Bank Account Dr. 30,00,000
To Share Application Account 30,00,000
(Being receipt of application money on
150,000 shares @ 20 per share)
2. Share Application Account Dr. 24,00,000
To Share Capital Account 20,00,000
To Share Allotment Account 4,00,000
(Being transfer of application money to share
capital account on 1,00,000 shares and that
for 20,000 shares utilized for allotment
money)
3. Share Application Account Dr. 6,00,000
To Bank Account 6,00,000
(Application money for 30,000 shares
refunded)
4. Share Allotment Account Dr. 20,00,000
Discount on Issue of Shares Account Dr. 10,00,000
To Share Capital Account 30,00,000
(Being allotment money due @ 20 each and
discount at 10 each)
5. Bank Account Dr. 15,96,800
To Share Allotment Account 15,96,800
(Allotment money received on 99,200 shares)
6. Share First Call Account Dr. 15,00,000
To Share Capital Account 15,00,000
(Being first call money due on 1,00,000 shares
@ 15 each)
7. Bank Account Dr. 14,97,000
To Share First Call Account 14,97,000
(Being receipt of first call money on 99,800
shares)
8. Share Second and Final Call Account Dr. 35,00,000
To Share Capital Account 35,00,000
(Being second and final call money due on
1,00,000 shares @ 35 per shares)

9. Bank Account Dr. 34,88,800
To Share Second & Final Call Account 34,88,800
(Being receipt of second and final call on
99,680 shares)

LOVELY PROFESSIONAL UNIVERSITY 17