Q.Deccan Textiles Ltd invited applications for 20,000 equity shares of ₹10 each, payable ₹3 on application, ₹4 on allotment and ₹3 on first and final call. Applications were received for only 18,000 shares — above the minimum subscription — and the directors allotted shares to all the applicants. All money due was duly received. Pass the necessary journal entries.

Because the issue is under-subscribed but still clears minimum subscription, the company simply proceeds with the 18,000 shares actually applied for — there is no separate 'shortfall' entry; every stage is worked out on 18,000 shares instead of the original 20,000 offered.

Since only 18,000 of the 20,000 offered shares were applied for, and this is above the SEBI minimum-subscription threshold, the company allots all 18,000 shares applied for and every subsequent stage is based on 18,000 shares.

Application

Allotment

First and final call

Cross-check: 54,000 + 72,000 + 54,000 = ₹1,80,000 = 18,000 shares × ₹10 face value ✓ — confirming the whole issue was correctly scaled down to the shares actually subscribed, with the 2,000 unsubscribed shares simply never entering any account.