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Question
(Issue at premium and calls in arrears)
Hindusthan Petroleum Ltd., invited application for 40,000 Equity shares of Rs 100 each payable as under including 20% premium:
| On Application | Rs 30 | On Allotment | Rs 40 (including premium) |
| On First Call | Rs 20 | On Final Call | Rs 30 |
All the shares were applied for and also allotted. One share holder who was allotted 500 shares failed to pay first and final call.
Record the above transactions in the journal of the company.
Solution
Books of Hindusthan Petroleum Ltd.
Journal Entry
| Date | Particulars | L.F. | Debit Amount (Rs.) | Credit Amount (Rs.) |
| Bank A/c Dr. To Equity Share Application A/c (Share application received on 40,000 shares of Rs.30 each) |
12,00,000 | 12,00,000 | ||
| Equity Share Application A/c Dr. To Equity Share Capital A/c (Share application transferred to share allotment) |
12,00,000 | 12,00,000 | ||
| Equity Share Allotment A/c Dr. To Equity Share Capital A/c To Securities Premium A/c [Share allotment due on 40,000 shares of Rs 40 each (including Premium of 20%)] |
16,00,000 | 8,00,000 8,00,000 |
||
| Bank A/c Dr. To Equity Share Allotment (Share application received) |
16,00,000 | 16,00,000 | ||
|
Equity Share First Call A/c Dr. |
8,00,000 | 8,00,000 | ||
| Bank A/c Dr. Calls-in-Arrears A/c Dr. To Equity Share First Call A/c (Share first call received on 39,500 shares of Rs 20 each) |
790,000 10,000 |
800,000 | ||
|
Equity Share Final Call A/c Dr. |
12,00,000 | 12,00,000 | ||
| Bank A/c Dr. Calls-in-Arrears To Equity Share Final Call A/c (Share first call received on 39,500 shares of Rs 30 each) |
11,85,000 15,000 |
12,00,000 |
Working Notes:
Calls-in-Arrears on First Call = 500 x 20 = Rs. 10,000
Calls-in-Arrears on Final Call = 500 x 30 = Rs. 15,000
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RELATED QUESTIONS
What do you mean by ‘issue of shares at premium’?
RS Ltd. has issued 25000 equity shares of Rs. 10 each at a premium of Rs. 2 per hares payable with application money. The incomplete journal entries related to the issue are given below. You are required to complete these blanks.
Books of RS Ltd.
Journal
| Date | Particulars | L.F. | Dr.(Rs.) | Cr.(Rs.) |
|
2015 Jan 10
|
_ _ _ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (Amount received on application for 35,000 shares @ Rs.5 per share) |
|||
|
Jan 16
|
_ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ (Transfer of application money to share capital securities premium, money refunded for 4,000 shares for rejected application and balance adjusted towards amount due on allotment as shares were allotted on Pro-rata basis) |
|||
|
Jan 31
|
_ _ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ (Amount due on allotment @ Rs.4 per share) |
|||
|
Feb 20
|
_ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ (Balance amount received on allotment) |
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|
April 01
|
_ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ (First and Final Call money due) |
|||
|
April 20
|
_ _ _ _ _ _ _ _ _ _ Dr Calls – in – arrears A/c Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ (Money received on First and Final Call except on 500 shares) |
|||
|
Aug 27
|
_ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ (Forfeited the shares on which call money was not received) |
|||
|
Oct 3
|
_ _ _ _ _ _ _ _ _ _ Dr _ _ _ _ _ _ _ _ _ _ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ (Re-issued the forfeited shares @ 8 per share fully paid - up) |
|||
| _ _ _ _ _ |
_ _ _ _ _ _ _ _ __ Dr To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ (_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ __ ) |
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