Question

Murari Ltd. invited applications for issuing 80,000 equity shares of ₹ 10 each at a premium of ₹ 4 per share. The amount per share was payable as follows: ₹ 5 on application and ₹ 9 (including premium) on allotment.

Applications were received for 1,40,000 shares and allotment was made on a pro-rata basis to all the applicants. Money overpaid on application was utilised towards sums due on allotment.

The allotment money was duly received except from Sameer, who had applied for 1,400 shares. His shares were forfeited.

Pass the necessary journal entries in the books of Murari Ltd. to record the above transactions. Open calls-in-arrears account wherever required.

Answer 1

Journal Entries
Date	Particulars	L.F.	Amount (₹)	Amount (₹)
	Bank A/c   ...Dr.		7,00,000
	To Share Application A/c			7,00,000
	(Being application money received on 1,40,000 shares)
	Share Application A/c   ...Dr.		7,00,000
	To Share Capital A/c			4,00,000
	To Share Allotment A/c			3,00,000
	(Being application money adjusted)
	Share Allotment  A/c   ...Dr.		7,20,000
	To Share Capital A/c			4,00,000
	To Securities Premium A/c			3,20,000
	(Being allotment money due with premium)
	Bank A/c   ...Dr.		4,15,800
	Calls-in-Arrears A/c   ...Dr.		4,200
	To Share allotment A/c			4,20,000
	(Being allotment money received on 79,200 shares)
	Share capital A/c   ...Dr.		8,000
	Securities Premium A/c   ...Dr.		3,200
	To Calls-in-Arrears A/c			4,200
	To Share Forfeiture A/c			7,000
	(Being 800 shares forfeited)