The authorised capital of ₹ 16,00,000 of Bharat Ltd. is divide into 1,60,000 Equity Shares of ₹ 10 each. Out of these shares, 80,000 Equity Shares were issued at par to public for subscription. The full nominal value is payable on application. All the shares were subscribed by the public and total amount was paid for. Pass necessary journal entries in the books of the company.

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Solution

Authorised Capital 1,60,000 equity shares of ₹ 10 each

Issued and Subscribed Capital 80,000 equity shares

Books of Bharat Limited

Journal

Date

Particulars

L.F.

Debit

Amount

(₹)

Credit

Amount

(₹)

Bank A/c

Dr.

8,00,000

To Equity Share Application A/c

8,00,000

(Share application money received for 80,000 Equity Shares of ₹ 10 each)

Equity Share Application A/c

Dr.

8,00,000

To Equity Share Capital A/c

8,00,000

(Share application of 80,000 shares of ₹ 10 each transferred to Equity Share Capital Accounts)

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PRACTICAL PROBLEMS

(Full Subscription)

The HMT Ltd. issued 15,000 Equity shares of Rs 10 each, payable as under-

On Application	Rs 3	On Allotment	Rs 2
On First Call	Rs 3	On Final Call	Rs 2

All the shares were fully subscribed by the public. All the money due on installments were received.

Pass journal entries to record the above transactions in the books of the company.

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Books of Bharat Limited Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)

	Bank A/c	Dr.		8,00,000
	To Equity Share Application A/c				8,00,000
	(Share application money received for 80,000 Equity Shares of ₹ 10 each)

	Equity Share Application A/c	Dr.		8,00,000
	To Equity Share Capital A/c				8,00,000
	(Share application of 80,000 shares of ₹ 10 each transferred to Equity Share Capital Accounts)