Question

Q4. Reliance infrastructure Ltd issued 20,000 shares of Rs 10 each at
a premium of Rs 2 per share payable as follows:
Rs 4 on application along with premium
Ps 3 on allotment and Balance on first call.
Pass necessary journal entries.
.
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Answer 1

Answer:

Bank a/c (20,000 × 4) - - - - Dr. 80,000

• To equity share application a/c. ----- 80,000

(BEING APPLICATION MONEY RECEIVED ON 20,000 SHARES @ RS. 4 PER SHARE INCLUDING PREMIUM OF 2 RS.)

Equity share application a/c)------- Dr. 80,000

• To equity share capital a/c (20,000 × 2) - - - - - 40,000
• To security premium reserve a!/c (20,000 ×2) - - - - 40,000.

(BEING APPLICATION MONEY TRANSFERRED TO SHARE CAPITAL ACCOUNT).

Equity share allotment a/c (20,000×3) - - Dr. 60,000

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

(BEING ALLOTMENT MONEY DUE ON 20,000 SHARES ).

Bank account - - - - - Dr. 60,000

• To equity share allotment account - - - 60,000

(BEING ALLOTMENT MONEY RECEIVED ON 20,000 SHARES @RS.3 PER SHARE).

Equity share first call a/c -(20,000×5) - - Dr. 1,00,000

• To Equity share capital a!/c - - - - 1,00,000

(BEING FIRST CALL MONEY DUE ON 20,000 SHARES @RS.5 PER SHARE).

Bank account - - - - - Dr. 1,00,000

• To equity share first call account - - 1,00,000

(BEING SHARE FIRST CALL MONEY RECEIVED ON 20,000 SHARES @RS.5 PER SHARE).

CALCULATION OF BALANCE AMOUNT -

APPLICATION = RS. 2

PREMIUM ON APPLICATION = RS. 2

ALLOTMENT = RS. 3

TOTAL AMOUNT = 7 - 2 (PREMIUM AMT.) = RS. 5 {FIRST CALL AMOUNT }

THANKS.