share capital transactions

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