Question

Light Lamps Ltd. issued 50,000 shares of ₹ 10 each as fully paid-up to the promoters for their services to set-up the company. It also issued 2,000 shares of ₹ 10 each credited as fully paid-up to the underwriters of shares for their services. journalise these transactions.

Answer 1

Attached is the file

Answer 2

Given:

Number of shares = 50,000

Share Price = 10

Additional shares = 2000

Share price = 10

To Find:

journal entries

Solution:

The correct journal entries are -

1. Incorporation Expenses A/c Dr 5,00,000

To share Capital A/c 5,00,000

( Being the shares issued to promoters)

2. Underwriting Commission a.c Dr. 20,000

To Underwriters A/c 20,000

( Being underwriting commission due)

3. Underwriters A/c Dr. 20,000

To Share Capital A/c 20,000

( Being shares issued to underwriters)