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Y Ltd have issued 12% , 20,000 preference shares of rupees 10 each to the public all amount is received in lump-sum pass the necessary journal entries?
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Y Ltd have issued 12% , 20,000 preference shares of rupees 10 each to ...
Journal Entries for Issuing Preference Shares of Y Ltd
1. Receipt of Application Money:
When the company receives the application money from the public, the following journal entry is passed:
Bank Account Debit
Share Application Account Credit
2. Allotment of Shares:
After the applications are received and scrutinized, the company decides to allot the shares. The following journal entry is passed at this stage:
Share Application Account Debit
Share Capital Account (Preference) Credit
3. Receipt of Allotment Money:
Once the shares are allotted, the company receives the allotment money from the shareholders. The following journal entry is passed for the receipt of allotment money:
Share Allotment Account Debit
Bank Account Credit
4. Calls in Arrears:
If any shareholder fails to pay the allotment money, it is treated as calls in arrears. The following journal entry is passed to record the calls in arrears:
Share Allotment Account Debit
Share Capital Calls in Arrears Account Credit
5. First Call:
When the company asks the shareholders to pay the first call, the following journal entry is passed:
Share First Call Account Debit
Share Capital Account (Preference) Credit
6. Second and Final Call:
If there is a second and final call, the following journal entry is passed when the shareholders pay the final call:
Share Second and Final Call Account Debit
Share Capital Account (Preference) Credit
7. Forfeiture of Shares:
If any shareholder fails to pay the final call, their shares may be forfeited. The following journal entry is passed to record the forfeiture of shares:
Share Capital Account (Preference) Debit
Share Forfeiture Account Credit
8. Reissue of Forfeited Shares:
If the forfeited shares are reissued, the following journal entry is passed:
Share Forfeiture Account Debit
Bank Account (Proceeds from Reissue of Shares) Credit
9. Share Capital Account:
The share capital account is credited with the amount of preference shares issued and debited with any forfeiture or reduction in share capital.
Share Capital Account (Preference) Debit
Share Forfeiture Account Credit
By following these steps, the necessary journal entries for issuing preference shares of Y Ltd can be recorded accurately.
1. Receipt of Application Money:
When the company receives the application money from the public, the following journal entry is passed:
Bank Account Debit
Share Application Account Credit
2. Allotment of Shares:
After the applications are received and scrutinized, the company decides to allot the shares. The following journal entry is passed at this stage:
Share Application Account Debit
Share Capital Account (Preference) Credit
3. Receipt of Allotment Money:
Once the shares are allotted, the company receives the allotment money from the shareholders. The following journal entry is passed for the receipt of allotment money:
Share Allotment Account Debit
Bank Account Credit
4. Calls in Arrears:
If any shareholder fails to pay the allotment money, it is treated as calls in arrears. The following journal entry is passed to record the calls in arrears:
Share Allotment Account Debit
Share Capital Calls in Arrears Account Credit
5. First Call:
When the company asks the shareholders to pay the first call, the following journal entry is passed:
Share First Call Account Debit
Share Capital Account (Preference) Credit
6. Second and Final Call:
If there is a second and final call, the following journal entry is passed when the shareholders pay the final call:
Share Second and Final Call Account Debit
Share Capital Account (Preference) Credit
7. Forfeiture of Shares:
If any shareholder fails to pay the final call, their shares may be forfeited. The following journal entry is passed to record the forfeiture of shares:
Share Capital Account (Preference) Debit
Share Forfeiture Account Credit
8. Reissue of Forfeited Shares:
If the forfeited shares are reissued, the following journal entry is passed:
Share Forfeiture Account Debit
Bank Account (Proceeds from Reissue of Shares) Credit
9. Share Capital Account:
The share capital account is credited with the amount of preference shares issued and debited with any forfeiture or reduction in share capital.
Share Capital Account (Preference) Debit
Share Forfeiture Account Credit
By following these steps, the necessary journal entries for issuing preference shares of Y Ltd can be recorded accurately.
Community Answer
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Y Ltd have issued 12% , 20,000 preference shares of rupees 10 each to the public all amount is received in lump-sum pass the necessary journal entries?
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Y Ltd have issued 12% , 20,000 preference shares of rupees 10 each to the public all amount is received in lump-sum pass the necessary journal entries? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Y Ltd have issued 12% , 20,000 preference shares of rupees 10 each to the public all amount is received in lump-sum pass the necessary journal entries? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Y Ltd have issued 12% , 20,000 preference shares of rupees 10 each to the public all amount is received in lump-sum pass the necessary journal entries?.
Y Ltd have issued 12% , 20,000 preference shares of rupees 10 each to the public all amount is received in lump-sum pass the necessary journal entries? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Y Ltd have issued 12% , 20,000 preference shares of rupees 10 each to the public all amount is received in lump-sum pass the necessary journal entries? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Y Ltd have issued 12% , 20,000 preference shares of rupees 10 each to the public all amount is received in lump-sum pass the necessary journal entries?.
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