X Ltd. invited application for 10,000 Equity Shares of ₹ 10 each issued at par . The amount was payable on application . The issue was oversubscribed by 2,000 shares and allotment was made on pro rata basis. Pass necessary Journal entries.

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Solution

Issued Capital 10,000 shares of Rs 10 each

Applied 12,000 shares

Over-subscribed by 2,000 shares

Books of X Limited

Journal

Date

Particulars

Debit

Amount

Rs

Credit Amount

Rs

Bank A/c

Dr.

1,20,000

To Share Application A/c

1,20,000

(Share Application received for 12,000 shares at Rs 10 each)

Share Application A/c

Dr.

1,20,000

To Share Capital A/c

1,00,000

To Bank A/c

20,000

(Application of 10,000 shares transferred to Share Capital and of 2,000 hares returned)

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Similar questions

A company issued 4,000 equity shares of Rs. 10 each at par payable as under:

On application Rs. 3; on allotment Rs. 2; On first call Rs. 4 and on final call Rs. 1 per share.

Applications were received for 10,000 shares. The allotment was made pro-rata. How much amount will be received in cash on the allotment?

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Books of X Limited Journal
Date	Particulars		Debit Amount Rs	Credit Amount Rs

	Bank A/c	Dr.	1,20,000
	To Share Application A/c			1,20,000
	(Share Application received for 12,000 shares at Rs 10 each)

	Share Application A/c	Dr.	1,20,000
	To Share Capital A/c			1,00,000
	To Bank A/c			20,000
	(Application of 10,000 shares transferred to Share Capital and of 2,000 hares returned)