A company decided to issue 7,50,000 equity shares of Rs 10 each at Rs 5 premium. The whole amount was payable on application. Applications for 20,00,000 shares were received among which those for 50,000 were rejected and shares were allotted to the remaining applicants on pro rata basis. Pass necessary journal entries.

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Dear Student

Journal

Date Particulars L.F. Debit
Amount
(Rs) Credit
Amount
(Rs)

Bank A/c (20,00,000 x 15) Dr. 3,00,00,000

To Share Application A/c 3,00,00,000

(Being Application money received on 20,00,000 shares)

Share Application A/c (50,000 x 15) Dr. 7,50,000

To Bank A/c 7,50,000

(Being 50,000 applications rejected)

Share Application A/c Dr. 2,92,50,000

To Share Capital A/c (7,50,000 x 10) 75,00,000

To Securities Premium A/c (7,50,000 x 5) 37,50,000

To Bank 1,80,00,000

(Being shares allotted on pro rata basis and all the excess money received is refunded)

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Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bank A/c (20,00,000 x 15)	Dr.		3,00,00,000
	To Share Application A/c				3,00,00,000
	(Being Application money received on 20,00,000 shares)

	Share Application A/c (50,000 x 15)	Dr.		7,50,000
	To Bank A/c				7,50,000
	(Being 50,000 applications rejected)

	Share Application A/c	Dr.		2,92,50,000
	To Share Capital A/c (7,50,000 x 10)				75,00,000
	To Securities Premium A/c (7,50,000 x 5)				37,50,000
	To Bank				1,80,00,000
	(Being shares allotted on pro rata basis and all the excess money received is refunded)