On Application Rs. 20 per share.
On Allotment Rs. 35 per share.
On First Call Rs. 25 per share.
On Second call Rs. 20 per share.
The Company received applications
for 30,000 equity shares. Applications for 20,000 shares were accepted and
allotted shares. Applications for 10,000 shares were rejected and refunded in
full.
The money due on allotment and
both the calls was received in full.
The expenses of issue amounted to
Rs. 5000.
Pass necessary journal entries in
the books of the company.
Solution: Journal Entries In the
Books Milind and Co. Ltd.
|
Date
|
Particulars
|
L.F.
|
Debit
|
Credit
|
|
1
|
Bank A/c ……….Dr.
|
|
600000
|
|
|
|
To Equity Share Application A/c
|
|
|
600000
|
|
|
[Being application money
received]
|
|
|
|
|
2
|
Equity Share Application A/c ……….Dr.
|
|
400000
|
|
|
|
To Equity Share Capital A/c
|
|
|
400000
|
|
|
[Being application money
transferred to share capital A/c
|
|
|
|
|
3
|
Equity Share Application A/c ……….Dr.
|
|
200000
|
|
|
|
To Bank A/c
|
|
|
200000
|
|
|
[Being excess application money
refunded]
|
|
|
|
|
4
|
Equity Share Allotment A/c ……….Dr.
|
|
700000
|
|
|
|
To Equity Share Capital A/c
|
|
|
700000
|
|
|
[Being allotment money due from
shareholders]
|
|
|
|
|
5
|
Bank A/c ……….Dr.
|
|
700000
|
|
|
|
To Equity Share Allotment A/c
|
|
|
700000
|
|
|
[Being allotment money
received]
|
|
|
|
|
6
|
Equity Share First Call A/c ……….Dr.
|
|
500000
|
|
|
|
To Equity Share Capital A/c
|
|
|
500000
|
|
|
[Being First call money due
from shareholders]
|
|
|
|
|
7
|
Bank A/c ……….Dr.
|
|
500000
|
|
|
|
To Equity Share First Call A/c
|
|
|
500000
|
|
|
[Being equity share First Call
money received from shareholders]
|
|
|
|
|
8
|
Equity share second call A/c ……….Dr.
|
|
400000
|
|
|
|
To Equity Share Capital A/c
|
|
|
400000
|
|
|
[Being Second call money due
from equity shareholders]
|
|
|
|
|
9
|
Bank A/c ……….Dr.
|
|
400000
|
|
|
|
To Equity Share Second Call A/c
|
|
|
400000
|
|
|
[Being Second call money
received from shareholders]
|
|
|
|
|
10
|
Expenses of Issue A/c ……….Dr.
|
|
5000
|
|
|
|
To Bank A/c
|
|
|
5000
|
|
|
[Being expenses of issue paid]
|
|
|
|
Working Note:
1. Calculation of Application
money refunded to Share applicants.
Application money received from
public
(30000 × 20) = 600000
Less: Application money
transferred to share capital
(20000 × 20) = 400000
Excess application money refunded
= 600000 – 400000 = 200000
2. Allotment money received
(20000 × 35) = 7,00,000
3. First Call money received
(20000 × 25) = 5,00,000
4. Second Call Money received
(20,000 × 20) = 4,00,000