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Authorised Share Capital

The journal e...

Question

The journal entry for the issue of shares at a premium to be recorded at the time of allotment is:

A

Share Capital Account Dr.
Share Premium Account Cr.
Share Allotment Account Cr.

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B

Share Allotment Account Dr.
Securities Premium Account Cr.
Share Capital Account Cr.

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C

Share Allotment Account Dr.
Share Premium Account Dr.
Share Capital Account Cr.

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D

Share Premium Account Dr.
Share Capital Account Dr.
Share Allotment Account Cr.

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Solution

The correct option is A Share Allotment Account Dr.
Securities Premium Account Cr.
Share Capital Account Cr.
Share allotment a/c is debited with total allotment money due.
Securities premium a/c Is credited with premium amount and Share capital a/c is also credited with the amount due on allotment less premium amount.

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Similar questions

Q. Satrun Ltd. was registered with an authorized capital of

R s . 12, 00, 000

1, 20, 000

equity shares of

R s .10

each. It issued

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equity shares to the public at premium of

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per share, payable as follows:
On application

R s . 6

R s . 9

(including premium of

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All the shares were applied for and allotted. One shareholder holding

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400

R s .7

per share fully called up.
You are required to :
(a) Pass journal entries on the book of the company.
(b) Prepare
(i) Securities Premium Reserve Account.
(ii) Share Capital Account

Q. D Ltd. issued 1,00,000 equity shares of Rs 10 each at a premium of Rs. 2 per share. The amount payable was Rs. 2 on application, Rs. 5 on allotment (including premium) & rest on first & final call. Applications were received for 1,20,000 shares. Excess application money was refunded to applications. All monies due were received except the allotment and first & final call monies on 1,000 shares. These shares were forfeited and reissued at Rs 9 per share.
On reissue of forfeited shares, balance of share forfeiture account transferred to capital reserve account will be _____.

Q. Y Ltd. forfeited 50 shares of Rs 100 each issued at 10% premium on which allotment money of Rs 30 per share (including premium) and first call of Rs 30 per share were not received and the second and final call of Rs 20 per share was not yet called. 20 of these shares as Rs 80 paid up for Rs 70 per share.
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Q. Y Ltd. forfeited 50 shares of Rs 100 each issued at 10% premium on which allotment money of Rs 30 per share (including premium) and first call of Rs 30 per share were not received and the second and final call of Rs 20 per share was not yet called. 20 of these shares were re-issued as Rs 80 paid up for Rs 70 per share.
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Q. Assertion :Premium received on issue of shares, is credited to share premium account but not to Profit and Loss account. Reason: Since share premium is not a trading profit, it is not distributed to shareholders.

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