Share Capital Transactions
A company is an artificial judicial person created by law and liquidated by law having common seal, perpetual succession etc.
Journal entries:
Application money received:
Bank A/c Dr.
To equity share application account
Resolution passed:
Equity share application account Dr.
To Equity share capital account
Allotment resolution:
Equity share allotment A/c Dr.
To Equity Share Capital
Allotment money received
Bank account Dr.
To Equity share allotment A/c
Equity share first and final call :
Equity share first and final call Dr.
To equity share capital
Call money received:
Bank account Dr.
To Equity share first and final call
Shares are issued with security premium
Equity share allotment Account Dr.
To equity share capital account
To security premium account
Bank account Dr.
To equity share allotment
Share forfeiture : When any allotment or call money is not received by company after due reminder, company can forfeit the shares.
Journal entries when share are issued at par:
Equity share capital account DR.
To equity share allottment
To Equity share call account
To share forfeiture account
Journal entries when share are issued with premium and premium is received:
Equity share capital account DR.
To Equity share call account
To share forfeiture account
Journal entries when share are issued with premium and premium is not received:
Equity share capital account DR.
Security premium account Dr.
To equity share allottment
To Equity share call account
To share forfeiture account
