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Journal Entries for Issue of Shares

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How do you treat the share application account at the time of the receipt of application money from the shareholders?

A

Debited

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B

Credited

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Q. ABC Company Ltd.offered for subscription 20,000 shares of ₹ 10 each payable ₹ 3 on application and ₹ 5 on allotment for each share. Applications were received fro 30,000 shares . Letters of regret were issued to applicants for 5,000 shares and their application money was refunded . Application money for other 5,000 shares was applied towards the payment for allotment money . The balance of allotment money was also received in due time .
You are to prepare the journal , Cash Book , Ledger Accounts and the Balance Sheet of the company.

Q. Arti Ltd. offered for subscription 20,000 shares of ₹ 10 each payable ₹ 3 on application, ₹ 5 on allotment and balance on first and final call. Applications were received for 30,000 shares. Letters of regret were issued to applicants for 5,000 shares and their application money was refunded. Application money for other 5,000 shares was applied towards the payment for allotment money. The balance of allotment money was also received in due time. Company didn't make first and final call.
You are to prepare the Journal, Cash Book, Ledger Accounts and show 'Share Capital' in the Balance Sheet of the company.

Which account is debited at the time of receipt of application money?

On receipt of application money, which account is debited ?

On receipt of application money, which account is credited ?

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Journal Entries for Issue of Shares

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