Light Lamps Ltd. issued 50,000 shares of ₹ 10 each as fully paid-up to the promoters for their services to set-up the company . It also issued 2,000 shares of ₹ 10 each credited as fully paid-up to the underwriters of shares for their services . journalise these transactions.

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Solution

Journal

Date

Particulars

L.F.

Debit

Amount

(Rs)

Credit

Amount

(Rs)

Incorporation Expenses A/c

Dr.

5,00,000

To Share Capital A/c (50,000 $\times$ 10)

5,00,000

(Shares issued to promoters)

Underwriting Commission A/c

Dr.

20,000

To Underwriters’ A/c

20,000

(Underwriting commission due)

Underwriters’ A/c

Dr.

20,000

To Share Capital A/c (2,000 $\times$ 10)

20,000

(Shares issued to underwriters)

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

	Incorporation Expenses A/c	Dr.		5,00,000
	To Share Capital A/c (50,000 $\times$ 10)				5,00,000
	(Shares issued to promoters)

	Underwriting Commission A/c	Dr.		20,000
	To Underwriters’ A/c				20,000
	(Underwriting commission due)

	Underwriters’ A/c	Dr.		20,000
	To Share Capital A/c (2,000 $\times$ 10)				20,000
	(Shares issued to underwriters)