Practical Problem 05

Journal Entries in the books of Sucheta Company Limited

Date	Particulars	L.F	Debit Amount (₹)	Credit Amount (₹)
1	Bank A/c Dr.		2,60,000
	To Equity Share Application A/c			2,60,000
	( Being application money on 26,000 equity shares @ ₹ 10 per share received)
2	Equity Share Application A/c Dr.		20,000
	To Bank A/c			20,000
	( Being application money on 2,000 equity shares @ ₹ 10 per share refunded)
3	Equity Share Application A/c Dr.		2,40,000
	To Equity Share Capital A/c			2,00,000
	To Equity Share Allotment A/c			40,000
	( Being application money on 20,000 equity shares transferred to equity share capital and application money on 2,000 equity shares adjusted against Share Allotment A/c)
4	Equity Share Allotment A/c Dr.		10,00,000
	To Equity Share Capital A/c			8,00,000
	To Share Premium A/c			2,00,000
	( Being allotment money (including premium) on 20,000 equity shares @ ₹ 50 per share due)
5	Bank A/c Dr.		9,60,000
	To Equity Share Allotment A/c			9,60,000
	( Being allotment money on 20,000 equity shares, after adjusting excess application money received)
6	Equity Share Final Call A/c Dr.		12,00,000
	To Equity Share Capital A/c			10,00,000
	To Share Premium A/c			2,00,000
	( Being share final call money (including premium) on 20,000 equity shares @ ₹ 60 per share due)
7	Bank A/c Dr		12,00,000
	To Equity Share Final Call A/c			12,00,000
	( Being share final call money on 20,000 equity shares @ ₹ 60 per share received)
			4880000	4880000

Working Note :

Calculation of Application money transferred to Share Allotment :

Application money received (26,000 × 10) :	2,60,000
Less: Application money refunded (2,000 × 10) :	20,000
	2,40,000
Less: Application money transferred to Share Capital : (20,000 × 10)	2,00,000
Excess money received on application transferred to Share Allotment:	40,000