Bank AC Dr 150000
to 12% preference share ac150000
12% preference share ac Dr150000
to preference share capital ac150000

Journal Entries for Issuing 12% 15000 Preference Shares of Rs.10 Each

To record the issuance of preference shares, the following journal entries should be passed:

1. To record the receipt of application money:

Bank Account Dr. = Rs. 1,50,000

Share Application Account Cr. = Rs. 1,50,000

2. To record the allotment of shares:

Share Application Account Dr. = Rs. 1,50,000

Share Allotment Account Cr. = Rs. 1,50,000

3. To record the receipt of allotment money:

Share Allotment Account Dr. = Rs. 1,50,000

Bank Account Cr. = Rs. 1,50,000

4. To record the issuance of shares:

Preference Share Capital Account Dr. = Rs. 1,20,000 (12% of Rs. 10,000)

Share Allotment Account Dr. = Rs. 30,000 (15000 shares x Rs. 2)

Preference Shares Account Cr. = Rs. 1,50,000 (15000 shares x Rs. 10)

Explanation:

The above journal entries are used to record the issuance of 12% 15000 preference shares of Rs.10 each to the public. The company has issued 15000 preference shares at a face value of Rs.10 each to the public. The total amount received by the company is Rs.1,50,000.

The first journal entry records the receipt of application money. The second journal entry is passed to record the allotment of shares. The third journal entry records the receipt of allotment money. The fourth journal entry records the issuance of shares. The preference share capital account is debited with the amount of preference share capital issued, i.e., Rs.1,20,000 (12% of Rs.10,000). The share allotment account is debited with the amount of allotment money received, i.e., Rs.30,000 (15000 shares x Rs.2). The preference shares account is credited with the total amount of preference shares issued, i.e., Rs.1,50,000 (15000 shares x Rs.10).

Overall, the above journal entries help to keep track of the issuance of preference shares and ensure that the company's accounts are accurately recorded.