X Ltd. issued 10,000 equity shares of ₹10 each, payable ₹3 on Application, ₹3 on Allotment, ₹2 on First Call and ₹2 on Second and Final Call. All the shares were fully subscribed and all money was duly received. Pass the necessary journal entries in the books of X Ltd.

Question

Accepted Answer

**Working.** Total received per share = 3 + 3 + 2 + 2 = ₹10 (face value), so the issue is at par.

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Bank A/c ...Dr | 30,000 | |
|   To Share Application A/c | | 30,000 |
| *(Being application money received on 10,000 shares @ ₹3 each)* | | |

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Share Application A/c ...Dr | 30,000 | |
|   To Share Capital A/c | | 30,000 |
| *(Being application money transferred to Share Capital Account)* | | |

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Share Allotment A/c ...Dr | 30,000 | |
|   To Share Capital A/c | | 30,000 |
| *(Being allotment money due on 10,000 shares @ ₹3 each)* | | |

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Bank A/c ...Dr | 30,000 | |
|   To Share Allotment A/c | | 30,000 |
| *(Being allotment money received)* | | |

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Share First Call A/c ...Dr | 20,000 | |
|   To Share Capital A/c | | 20,000 |
| *(Being first call money due on 10,000 shares @ ₹2 each)* | | |

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Bank A/c ...Dr | 20,000 | |
|   To Share First Call A/c | | 20,000 |
| *(Being first call money received)* | | |

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Share Second and Final Call A/c ...Dr | 20,000 | |
|   To Share Capital A/c | | 20,000 |
| *(Being second and final call money due on 10,000 shares @ ₹2 each)* | | |

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Bank A/c ...Dr | 20,000 | |
|   To Share Second and Final Call A/c | | 20,000 |
| *(Being second and final call money received)* | | |

> [!ANSWER]
> All eight entries total ₹1,00,000 received and credited to Share Capital Account (30,000 + 30,000 + 20,000 + 20,000), exactly equal to 10,000 shares × ₹10 face value — the shares are now fully paid up.

Term	Meaning
At par	Issue price equals the face (nominal) value
At premium	Issue price is more than the face value
At discount	Issue price is less than the face value
At loan	Not a mode of issuing shares at all

Q.X Ltd. issued 10,000 equity shares of ₹10 each, payable ₹3 on Application, ₹3 on Allotment, ₹2 on First Call and ₹2 on Second and Final Call. All the shares were fully subscribed and all money was duly received. Pass the necessary journal entries in the books of X Ltd.

Concept understanding — Issue of Shares for Cash — Application, Allotment, Calls and Premium

Particulars	Debit (₹)	Credit (₹)
Bank A/c ...Dr	30,000
To Share Application A/c		30,000
(Being application money received on 10,000 shares @ ₹3 each)

Particulars	Debit (₹)	Credit (₹)
Share Application A/c ...Dr	30,000
To Share Capital A/c		30,000
(Being application money transferred to Share Capital Account)

Particulars	Debit (₹)	Credit (₹)
Share Allotment A/c ...Dr	30,000
To Share Capital A/c		30,000
(Being allotment money due on 10,000 shares @ ₹3 each)

Particulars	Debit (₹)	Credit (₹)
Bank A/c ...Dr	30,000
To Share Allotment A/c		30,000
(Being allotment money received)

Particulars	Debit (₹)	Credit (₹)
Share First Call A/c ...Dr	20,000
To Share Capital A/c		20,000
(Being first call money due on 10,000 shares @ ₹2 each)

Particulars	Debit (₹)	Credit (₹)
Bank A/c ...Dr	20,000
To Share First Call A/c		20,000
(Being first call money received)

Particulars	Debit (₹)	Credit (₹)
Share Second and Final Call A/c ...Dr	20,000
To Share Capital A/c		20,000
(Being second and final call money due on 10,000 shares @ ₹2 each)

Particulars	Debit (₹)	Credit (₹)
Bank A/c ...Dr	20,000
To Share Second and Final Call A/c		20,000
(Being second and final call money received)

Q.X Ltd. issued 10,000 equity shares of ₹10 each, payable ₹3 on Application, ₹3 on Allotment, ₹2 on First Call and ₹2 on Second and Final Call. All the shares were fully subscribed and all money was duly received. Pass the necessary journal entries in the books of X Ltd.

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