Y Ltd. issued 5,000 equity shares of ₹10 each at a premium of ₹2 per share, payable ₹3 on Application, ₹5 on Allotment (including premium) and ₹4 on First and Final Call. All shares were subscribed and all money was received in full. Pass the necessary journal entries.

Question

Accepted Answer

**Working.** Face value ₹10 + Premium ₹2 = Issue price ₹12 per share; instalments 3 + 5 + 4 = 12 ✓. The ₹5 allotment instalment splits into ₹3 (face value) + ₹2 (premium).

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Bank A/c ...Dr | 15,000 | |
|   To Share Application A/c | | 15,000 |
| *(Being application money received on 5,000 shares @ ₹3 each)* | | |

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Share Application A/c ...Dr | 15,000 | |
|   To Share Capital A/c | | 15,000 |
| *(Being application money transferred to Share Capital Account)* | | |

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Share Allotment A/c ...Dr | 25,000 | |
|   To Share Capital A/c | | 15,000 |
|   To Securities Premium A/c | | 10,000 |
| *(Being allotment money due on 5,000 shares @ ₹5 each, including premium of ₹2 per share)* | | |

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Bank A/c ...Dr | 25,000 | |
|   To Share Allotment A/c | | 25,000 |
| *(Being allotment money received)* | | |

| Particulars | Debit (₹) | Credit (₹) |
|---|---|---|
| Share First and Final Call A/c ...Dr | 20,000 | |
|   To Share Capital A/c | | 20,000 |
| *(Being first and final call money due on 5,000 shares @ ₹4 each)* | | |

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

> [!ANSWER]
> Share Capital Account = 15,000 + 15,000 + 20,000 = ₹50,000 (5,000 × ₹10). Securities Premium Account = ₹10,000 (5,000 × ₹2). Total received through the bank = 15,000 + 25,000 + 20,000 = ₹60,000 (5,000 × ₹12 issue price).

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.Y Ltd. issued 5,000 equity shares of ₹10 each at a premium of ₹2 per share, payable ₹3 on Application, ₹5 on Allotment (including premium) and ₹4 on First and Final Call. All shares were subscribed and all money was received in full. Pass the necessary journal entries.

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

Particulars	Debit (₹)	Credit (₹)
Bank A/c ...Dr	15,000
To Share Application A/c		15,000
(Being application money received on 5,000 shares @ ₹3 each)

Particulars	Debit (₹)	Credit (₹)
Share Application A/c ...Dr	15,000
To Share Capital A/c		15,000
(Being application money transferred to Share Capital Account)

Particulars	Debit (₹)	Credit (₹)
Share Allotment A/c ...Dr	25,000
To Share Capital A/c		15,000
To Securities Premium A/c		10,000
(Being allotment money due on 5,000 shares @ ₹5 each, including premium of ₹2 per share)

Particulars	Debit (₹)	Credit (₹)
Bank A/c ...Dr	25,000
To Share Allotment A/c		25,000
(Being allotment money received)

Particulars	Debit (₹)	Credit (₹)
Share First and Final Call A/c ...Dr	20,000
To Share Capital A/c		20,000
(Being first and final call money due on 5,000 shares @ ₹4 each)

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

Q.Y Ltd. issued 5,000 equity shares of ₹10 each at a premium of ₹2 per share, payable ₹3 on Application, ₹5 on Allotment (including premium) and ₹4 on First and Final Call. All shares were subscribed and all money was received in full. Pass the necessary journal entries.

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