Silver Star Ltd made a first call of ₹5 per share on its 10,000 fully subscribed equity shares of ₹10 each, due on 1 April. Ashok, who held 200 shares, could not pay the call money until it was received, along with the final call of ₹5 per share, on 1 October — six months later.

Question

Silver Star Ltd made a first call of ₹5 per share on its 10,000 fully subscribed equity shares of ₹10 each, due on 1 April. Ashok, who held 200 shares, could not pay the call money until it was received, along with the final call of ₹5 per share, on 1 October — six months later. Bhanu, who held 100 shares, paid the final call of ₹5 per share on 1 April itself, three months before it actually became due on 1 July. The company charges interest on calls-in-arrears at 10% p.a. and allows interest on calls-in-advance at 12% p.a., as permitted by Table F. Pass the necessary journal entries, including those for interest.

Accepted Answer

**Step 1 — First call made and mostly collected**

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Equity Share First Call A/c Dr (10,000 × ₹5) | 50,000 | |
|   To Equity Share Capital A/c | | 50,000 |
| Bank A/c Dr (50,000 − 1,000) | 49,000 | |
|   To Equity Share First Call A/c | | 49,000 |
| *(Being first call received from all shareholders except Ashok, on 200 shares)* | | |
| Calls-in-Arrears A/c Dr (200 × ₹5) | 1,000 | |
|   To Equity Share First Call A/c | | 1,000 |
| *(Being amount unpaid by Ashok transferred to Calls-in-Arrears)* | | |

**Step 2 — Bhanu pays the final call in advance, on 1 April**

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Bank A/c Dr (100 × ₹5) | 500 | |
|   To Calls-in-Advance A/c | | 500 |
| *(Being final call money of ₹5 per share received in advance from Bhanu on 100 shares, three months before due)* | | |

**Step 3 — Final call made on 1 July and money collected on 1 October**

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Equity Share Final Call A/c Dr (10,000 × ₹5) | 50,000 | |
|   To Equity Share Capital A/c | | 50,000 |
| Calls-in-Advance A/c Dr | 500 | |
|   To Equity Share Final Call A/c | | 500 |
| *(Being Bhanu's advance adjusted against the final call now due)* | | |
| Bank A/c Dr (1,000 arrears + 1,000 first-call element already covered above; here, the balance final-call cash of 49,500 plus arrears of 1,000 received together on 1 October) | 50,500 | |
|   To Calls-in-Arrears A/c | | 1,000 |
|   To Equity Share Final Call A/c (50,000 − 500 adjusted) | | 49,500 |
| *(Being Ashok's arrears and the final call — except Bhanu's pre-paid portion — received on 1 October)* | | | …

Particulars	Debit (₹)	Credit (₹)
Equity Share First Call A/c Dr (10,000 × ₹5)	50,000
To Equity Share Capital A/c		50,000
Bank A/c Dr (50,000 − 1,000)	49,000
To Equity Share First Call A/c		49,000
(Being first call received from all shareholders except Ashok, on 200 shares)
Calls-in-Arrears A/c Dr (200 × ₹5)	1,000
To Equity Share First Call A/c		1,000
(Being amount unpaid by Ashok transferred to Calls-in-Arrears)

Particulars	Debit (₹)	Credit (₹)
Bank A/c Dr (100 × ₹5)	500
To Calls-in-Advance A/c		500
(Being final call money of ₹5 per share received in advance from Bhanu on 100 shares, three months before due)

Particulars	Debit (₹)	Credit (₹)
Equity Share Final Call A/c Dr (10,000 × ₹5)	50,000
To Equity Share Capital A/c		50,000
Calls-in-Advance A/c Dr	500
To Equity Share Final Call A/c		500
(Being Bhanu's advance adjusted against the final call now due)
Bank A/c Dr (1,000 arrears + 1,000 first-call element already covered above; here, the balance final-call cash of 49,500 plus arrears of 1,000 received together on 1 October)	50,500
To Calls-in-Arrears A/c		1,000
To Equity Share Final Call A/c (50,000 − 500 adjusted)		49,500
(Being Ashok's arrears and the final call — except Bhanu's pre-paid portion — received on 1 October)

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