Question

Company invited Applications for 10000 shares and Received Applications for 15000 shares,
along with the Application Money @ Rs. 4 per share. Allotment Money per share was demanded @ Rs. 3
per share. Pass Journal Entries.

Answer 1

Entry 1.

Bank a/c (15000×4) - - - - - - - - - Dr. 60,000

• To equity share application a/c - - - 60,000

(Being the application money on 15,000 equity shares received @ rs. 4 per share).

Entry 2.

Equity share application a/c - - - - - Dr. 60,000

• To Equity share capital a/c - - - - -60,000.

(being the transfer of application money to equity share capital a/c on allotment).

Entry 3.

Equity share allotment account (10000 ×3) - - - Dr. 30,000

• To equity share capital account - - - - 30,000.

(being the allotment money due).

Entry 4.

Bank account - - - - - Dr. 30,000

• To equity share allotment account - - 30,000.

(being the receipt of rs.3 per share on 10,000 equity shares).

Thanks.