Question

x ltd. invited applications for 10,000 equity share of Rs 10 each assued at 20% premium. The whole amount was payable on application. the issue was undersubscribed by 1,000 share. pass the journal entries

Answer 1

In the Books of X. Ltd.

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bank A/c [9,000 x 12]	Dr.		1,08,000
	To Equity Share Application and Allotment A/c				1,08,000
	(being money received on 9,000 shares)
	Equity Share Application and Allotment A/c			1,08,000
	To Equity Share Capital A/c [9,000 x 10]				90,000
	To Securities Premium Reserve A/c [9,000 x 2]				18,000
	(being application money transferred to Capital)