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Dipika Ltd. invited applications for issuing 20000 equity share of Rs100 each at a premium of Rs20 per share. The whole amount was payable on application.Pass necessary journal entries in the book of company
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Dipika Ltd. invited applications for issuing 20000 equity share of Rs1...
Journal Entries for Issuing Equity Shares with Premium
The following are the journal entries required to be passed in the books of Dipika Ltd. for issuing 20,000 equity shares with a face value of Rs. 100 each at a premium of Rs. 20 per share:
1. On receipt of applications
Dr. Bank Account (20,00,000)
Cr. Equity Share Application Account (20,00,000)
2. On allotment of shares
Dr. Equity Share Application Account (20,00,000)
Cr. Share Capital Account (20,00,000)
3. On receipt of share premium
Dr. Bank Account (4,00,000)
Cr. Share Premium Account (4,00,000)
Explanation of Journal Entries
1. On receipt of applications
Dipika Ltd. received applications for 20,000 equity shares of Rs. 100 each at a premium of Rs. 20 per share. The total amount received on application is Rs. 20,00,000. The journal entry is passed to record the receipt of applications.
2. On allotment of shares
Dipika Ltd. allotted 20,000 equity shares to the applicants. The journal entry is passed to record the allotment of shares. The amount received on application is transferred to the share capital account.
3. On receipt of share premium
Dipika Ltd. received a share premium of Rs. 4,00,000 on the issue of equity shares. The journal entry is passed to record the receipt of share premium. The share premium is credited to the share premium account.
Conclusion
Issuing equity shares with a premium is a common method of raising capital for companies. The journal entries for issuing equity shares with a premium are simple and straightforward. The entries need to be passed on receipt of applications, on allotment of shares, and on receipt of share premium.
The following are the journal entries required to be passed in the books of Dipika Ltd. for issuing 20,000 equity shares with a face value of Rs. 100 each at a premium of Rs. 20 per share:
1. On receipt of applications
Dr. Bank Account (20,00,000)
Cr. Equity Share Application Account (20,00,000)
2. On allotment of shares
Dr. Equity Share Application Account (20,00,000)
Cr. Share Capital Account (20,00,000)
3. On receipt of share premium
Dr. Bank Account (4,00,000)
Cr. Share Premium Account (4,00,000)
Explanation of Journal Entries
1. On receipt of applications
Dipika Ltd. received applications for 20,000 equity shares of Rs. 100 each at a premium of Rs. 20 per share. The total amount received on application is Rs. 20,00,000. The journal entry is passed to record the receipt of applications.
2. On allotment of shares
Dipika Ltd. allotted 20,000 equity shares to the applicants. The journal entry is passed to record the allotment of shares. The amount received on application is transferred to the share capital account.
3. On receipt of share premium
Dipika Ltd. received a share premium of Rs. 4,00,000 on the issue of equity shares. The journal entry is passed to record the receipt of share premium. The share premium is credited to the share premium account.
Conclusion
Issuing equity shares with a premium is a common method of raising capital for companies. The journal entries for issuing equity shares with a premium are simple and straightforward. The entries need to be passed on receipt of applications, on allotment of shares, and on receipt of share premium.
Community Answer
Dipika Ltd. invited applications for issuing 20000 equity share of Rs1...
Bank a/c. Dr. 2400000 To eq sh app a/ceq sh app a/c. Dr 2400000 To eq sh cap a/c. 200000 To security premium. 40000 a/c
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Dipika Ltd. invited applications for issuing 20000 equity share of Rs100 each at a premium of Rs20 per share. The whole amount was payable on application.Pass necessary journal entries in the book of company
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Dipika Ltd. invited applications for issuing 20000 equity share of Rs100 each at a premium of Rs20 per share. The whole amount was payable on application.Pass necessary journal entries in the book of company for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Dipika Ltd. invited applications for issuing 20000 equity share of Rs100 each at a premium of Rs20 per share. The whole amount was payable on application.Pass necessary journal entries in the book of company covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Dipika Ltd. invited applications for issuing 20000 equity share of Rs100 each at a premium of Rs20 per share. The whole amount was payable on application.Pass necessary journal entries in the book of company .
Dipika Ltd. invited applications for issuing 20000 equity share of Rs100 each at a premium of Rs20 per share. The whole amount was payable on application.Pass necessary journal entries in the book of company for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Dipika Ltd. invited applications for issuing 20000 equity share of Rs100 each at a premium of Rs20 per share. The whole amount was payable on application.Pass necessary journal entries in the book of company covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Dipika Ltd. invited applications for issuing 20000 equity share of Rs100 each at a premium of Rs20 per share. The whole amount was payable on application.Pass necessary journal entries in the book of company .
Solutions for Dipika Ltd. invited applications for issuing 20000 equity share of Rs100 each at a premium of Rs20 per share. The whole amount was payable on application.Pass necessary journal entries in the book of company in English & in Hindi are available as part of our courses for Class 12.
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