Vinod Papers Ltd. invited applications for issuing 1,00,000 shares of Rs 10 each at a
premium of Rs 4 per share payable as follows:
On Application Rs 4 (including premium Rs 2)
On Allotment Rs 4 (including premium Rs 2)
On First & Final Call Rs 6
Applications were received for 1,30,000 shares and pro-rata allotment was made to all
applicants as follows:
(i) Applicants for 80,000 shares were allotted 60,000 shares, and
(ii) Applicants for 50,000 shares were allotted 40,000 shares.
X, who belonged to the first category and was allotted 900 shares failed to pay the
allotment and call money.
Y, who belonged to the second category and who applied for 1,000 shares also failed to
pay the allotment and call money. Their shares were forfeited and 1,400 of the forfeited
shares were re-issued @ Rs 9 per share as fully paid. Re-issued shares included whole of
Y's shares.
Pass necessary journal entries in the books of Vinod Papers Ltd.
Answers
as there is premium on both application and allotment..
Journal entry in the books of Vinod Papers Ltd.
Bank a/c Dr 600000
To share application a/c 600000
(Being share application money received)
Share application a/c Dr 600000
To share capital a/c 400000
To security premium a/c 200000
To share allotment a/c 200000
(Being share application money transferred to share capital account and pro-rata made)
Share allotment a/c Dr 400000
To share capital a/c 200000
To Security premium a/c 200000
(Being share allotment money transferred to share capital account)
Bank a/c Dr 198800
To share allotment a/c 198800
(Being share allotment money received)
Share first and final call a/c Dr 600000
To share capital a/c 600000
(Being first and final call money transferred to share capital account)
Bank a/c Dr 589800
To share first and final call a/c 589800
(Being first and final call money received)
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