Arnab company limited invited applications for the issue of 20000 equi...
Journal Entries for the Issue of Equity Shares
- When the shares are applied for:
- Bank A/c Dr. 80,000
- Share Application A/c Cr. 80,000
- When the shares are allotted:
- Share Application A/c Dr. 80,000
- Share Capital A/c Cr. 80,000
- When the first call is made:
- Share Capital A/c Dr. 1,20,000
- Call-in-Advance A/c Cr. 1,20,000
- When the first call is received:
- Call-in-Advance A/c Dr. 1,20,000
- Share Capital A/c Cr. 1,20,000
- When the final call is made:
- Share Capital A/c Dr. 1,20,000
- Call-in-Advance A/c Cr. 1,20,000
- When the final call is received:
- Call-in-Advance A/c Dr. 1,20,000
- Share Capital A/c Cr. 1,20,000
In this scenario, the journal entries reflect the entire process of issuing equity shares at a discount and collecting the necessary funds from the shareholders. It starts with the application for shares, followed by the allotment, and then the collection of the first and final call money. The entries ensure that the accounting records accurately reflect the financial transactions related to the issuance of equity shares.
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