Question

Patna Tractor Ltd. issued to the public, 5000 equity shares of Rs.100 each on Jan.1, 2019 payable as follows: On application Rs.20, Allotment (made on March 1,2019 )Rs.30, First call (made on June 1,2019) Rs.30 and Final call (made on Aug.1, 2019) Rs.20. Application were received all shares and the shares were allotted.One shareholder to whom 200 shares were allotted paid all the money with the first call money. Give necessary journal entries in the company.

Answer 1

Give necessary journal entries in the company.

Explanation:

Of the 5000 share issued, 200 shares full money was paid only in the first call. Hence 4800 shares must be taken for application/allotment and final call and for first call all 5000 shares while passing journal entries

1. On receipt of applications money:

Bank a/c Dr.     96000

   To share application a/c        96000

(Being share application money recd on 4800 shares @ Rs 20/share)

2. On allotment of shares:

Share application a/c Dr.   96000

        To share capital a/c                   96000

(Being appropriation of application money towards share capital)

Share Allotment a/c Dr.  150000

          To share capital a/c                    150000

(Being allotment money due on 5000 shares @ Rs. 30 per share)

3. When allotment money is received, the following entry is passed:

Bank a/c Dr.      144000

    To share allotment a/c         144000

(Being allotment money received on 4800 shares @ 30/share)

4. On first call made on the shares

Share first call a/c Dr.    150000

                To share capital a/c     150000

(Being share first call money due on 5000 shares @ Rs 30/share)

5.  On receipt of first call money:

   Bank a/c Dr.        154000

                    To share first call a/c    150000

                    To share final call a/c       4000

(Being first call money received on 5000 shares @ rs 30/share plus second call money received on 200 shares at Rs 20/share)

6. On final call made on the shares

        Share final call a/c Dr.    100000

                             To share capital a/c     100000

(Being share first call money due on 5000 shares @ Rs 20/share)

7.  On receipt of final call money:

   Share final call a/c Dr.    96000

                             To share capital a/c     96000

(Being share final call money due on 4800 shares @ Rs 20/share)

To know more

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