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A limited company with registered capital of 500000in shares of 10 each issued on first call 25000shares payable Rs1 for application,rs2 for allotment and rs3 for first call three months later all the money payable on allotment were duly received but on first call being made one shareholders paid the entire balance on his holding of rs300 shares and five shareholders with a total holding of rs1000 failed to pay the first call on their shares pass necessary journal entry.?
Most Upvoted Answer
A limited company with registered capital of 500000in shares of 10 eac...
Journal Entry for First Call Not Paid by Shareholders

Background Information:
A limited company with registered capital of 500000 in shares of 10 each issued on first call 25000 shares payable Rs1 for application, Rs2 for allotment and Rs3 for first call three months later. All the money payable on allotment was duly received. However, on first call being made, one shareholder paid the entire balance on his holding of Rs300 shares, and five shareholders with a total holding of Rs1000 failed to pay the first call on their shares.

Journal Entry:
When a shareholder fails to pay the first call, it is considered a default. The company must take action to ensure that the defaulters pay their dues. The following journal entry will be made to record the default:

Bank Account Dr. 22,000
Share Capital Account Cr. 22,000

Explanation:
The journal entry above shows that the bank account is debited with the amount of Rs22,000, which represents the total amount due from the defaulting shareholders. The share capital account is credited with the same amount. The entry indicates that the company has received the money due from the shareholders who paid the first call on their shares. It also shows that the company has taken action against the defaulting shareholders and has received the amount owed from them.

Conclusion:
In conclusion, when shareholders fail to pay the first call on their shares, the company must take action against them. The journal entry made for this purpose shows that the company has received the amount due from the defaulters and has credited it to the share capital account. It is important for the company to follow up on such defaults to ensure that all shareholders fulfill their obligations.
Community Answer
A limited company with registered capital of 500000in shares of 10 eac...
Calls in arrears=3000; calls paid in advance 1200 ; cash at bank 148200
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A limited company with registered capital of 500000in shares of 10 each issued on first call 25000shares payable Rs1 for application,rs2 for allotment and rs3 for first call three months later all the money payable on allotment were duly received but on first call being made one shareholders paid the entire balance on his holding of rs300 shares and five shareholders with a total holding of rs1000 failed to pay the first call on their shares pass necessary journal entry.?
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A limited company with registered capital of 500000in shares of 10 each issued on first call 25000shares payable Rs1 for application,rs2 for allotment and rs3 for first call three months later all the money payable on allotment were duly received but on first call being made one shareholders paid the entire balance on his holding of rs300 shares and five shareholders with a total holding of rs1000 failed to pay the first call on their shares pass necessary journal entry.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A limited company with registered capital of 500000in shares of 10 each issued on first call 25000shares payable Rs1 for application,rs2 for allotment and rs3 for first call three months later all the money payable on allotment were duly received but on first call being made one shareholders paid the entire balance on his holding of rs300 shares and five shareholders with a total holding of rs1000 failed to pay the first call on their shares pass necessary journal entry.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A limited company with registered capital of 500000in shares of 10 each issued on first call 25000shares payable Rs1 for application,rs2 for allotment and rs3 for first call three months later all the money payable on allotment were duly received but on first call being made one shareholders paid the entire balance on his holding of rs300 shares and five shareholders with a total holding of rs1000 failed to pay the first call on their shares pass necessary journal entry.?.
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