Question

Janta Papers Limited invited applications for 1,00,000 equity shares of Rs.25 each payable as under:
`{:("On Application",,Rs. 5.00 " per share"),("On Allotment",,Rs. 7.50 " per share"),("On First Call",,Rs. 7.50 " per share"),(("due two months after allotment"),,),("On Second and Final
Call",,Rs. 5.00 " per share"),(("due two months after First Call"),,):}`
Applications were received for 4,00,000 shares on January 01, 2017 and allotment was made on February 01, 2017.
Record journal entries in the books of the company to record these share capital transactions under each of the following circumstances:
1 The directors decide to allot 1,00,000 shares in full to selected applicants and the applications for the remaining 3,00,000 shares were rejected outright.
2.The directors decide to make a pro-rata allotment of 25 per cent of the shares applied for to every applicant, to apply the balance of application money towards amount due on allotment, and to refund the amount remaining thereafter.
3. The directors totally reject applications for 2,00,000 shares, accept full application for 80,000 shares and make a pro-rata allotment of the 20,000 shares to remaining applicants and the excess application money is to be adjusted towards allotment and calls to be made.

Answer 1

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Answer 2

Following are the journal entries for this question:

1. Bank a/c  dr.  20,00,000

                   to equity share capital a/c   20,00,000

(being money received on application for 4,00,000 @₹5)

2. Equity share capital capital a/c   dr.   20,00,000

                                      to equity share capital a/c  5,00,000

                                       to bank a/c                          15,00,000

(being money transferred to share capital and refunded money for rejected applications)

3. Equity share allotment a/c  dr.  7,50,000

                          to equity share capital a/c    7,50,000

(being allotment due for 1,00,000 shares @₹7.50)

4. Bank a/c  dr.  7,50,000

                     to equity share allotment a/c   7,50,000

(being allotment money received)

5. Equity share first call a/c  dr.  7,50,000

                                 to equity share capital a/c  7,50,000

(being first call due for 1,00,000 shares @₹7.50)

6. Bank a/c  dr.   7,50,000

                    to equity share capital a/c  7,50,000

(being first call money received)

7. Equity share second and final call a/c  dr.  5,00,000

                                        to equity share capital a/c    5,00,000

(being final call due for 1,00,000 shares @₹5)

8. Bank a/c   dr.  5,00,000

             to share second and final call a/c  5,00,000

(being first call money received)