Question

jain ltd. invited application for issuing 112000 equiry shares of rs. 10 each at par.the amount per share was payable as follows:on applicatio rs 1, on allotment rs2, on first call rs 3,on second and final call rs 4. application for 100000 shares were received.Shares were fully alloted to all the applicants. Ramesh failed to pay his allotment money which wasrs.2000.his sharewere forfeited immediately and received to rakesh as fully -paidup for rs 12 per share.Afterwards ,the first call was made .Suresh did not pay the first call on 500 sharesapplied by him. his shares were forfeited after the final call were re-issued to bhavesh at rs.5per shareas rs.6 paid up.Afterwards the second and final call was made and was duly received.pass neccesary journal entries for the above transaction in the book of jain ltd. by opening calls -in-arrearsaccount

Answer 1

Issue of Share (Journal entries)

Explanation:

Pls refer to the pic below

Issue of Shares is the process in which companies allot new shares to shareholders. Shareholders can be either individuals or corporates. The company follows the rules prescribed by Companies Act 2013 while issuing the shares. Issue of Prospectus, Receiving Applications, Allotment of Shares are three basic steps of the procedure of issuing the shares. The process of creating new shares is known as Allocation or allotment.