Question

10000 equity shares of rs.20 each are issued for public subscription at a premium of 10% . The full amount is payable on applications . Application were received for 20000 shares and it was decided to make pro rata allotment to all the applicants. journalise the transaction​

Answer 1

Bank A/c. Dr. 440000

To share application & allotment 440000

Share application A/c Dr. 440000

To share capital 200000

To security premium reserve. 20000

To bank 220000