Accounting of shares & debentures

1) is an artificial person created by law to achieve the object for which it is

formed.
2) The amount of capital with which the company intends to be registered is called
3) The amount payable on application on every security shall not be less than
4) No form of application for the purchase of any of the securities of a company shall be issued
unless such form is accompanied by an

5) There are __________ types of Underwriting Agreements.

Ans:-

1) Company
2) registered capital.
3) five per cent
4) abridged prospectus
5) Two

K Ltd. made an issue of $ 10,00,00 equity shares of $ 15 each, payable $ 3 on application, $ 6 on

allotment and $6 on call. All the shares are subscribed and amounts duly received. Pass journal
entries to give effect to these.

In the book of K ltd

Journal Entry
Particular Debit Credit
Bank A/c $ 3,00,000.00  
To Equity Share Application A/c    
(Share application money on 10,00,00 equity shares @ 3 each   $ 3,00,000.00
received)
     
Equity Share Application A/c $ 3,00,000.00  
To Equity Share Capital A/c   $ 3,00,000.00
(Share application money transferred to share capital account as    
per Board’s
resolution no. ……………. dated ………)    
     
Equity Share Allotment A/c $ 6,00,000.00  
To Equity Share Capital A/c   $ 6,00,000.00
 (Share Allotment due on 10,00,00 shares @ 6 per share as per    
Board’s
resolution no. ……… dated……)    
     
Bank A/c $ 6,00,000.00  
To Equity Share Allotment A/c   $ 6,00,000.00
(Allotment money received)    
     
Equity Share First and Final Call A/c $ 6,00,000.00  
To Equity Share Capital A/c   $ 6,00,000.00
(Share 1st and Final Call due on 10,00,00 shares @ 6 share as per    
Board’s
resolution no. ……… dated……)    
     
Bank A/c $ 6,00,000.00  
To Equity Share First and Final Call A/c   $ 6,00,000.00
(For shares First and Final Call money received on 10,00,00    
shares @ 4 per
share)    

Orange Ltd. issued $5,00,00,00 Equity shares of $10 each at a premium of $ 4 per share payable $1
per share on application, $6 per share on allotment (including premium), $ 3 on first call and the
balance on final call. The shares were all subscribed and all money due was received except the first
call money on $1,00,000 shares and the Final call money on $1,50,000 shares. Give the Cash Book
and Journal entries to record the above transactions.

CASH BOOK
Particular Amt Particular Amt
500000
To Equity Share Application 0 By Balance c/d 6,991
To Equity Share Allotment 3,000    
To Equity Share 1st Call 1,497    
To Equity Share Final Call 1,994    
  6991   6,991