Terms of Issue of Shares> Issue of Shares at Par

A. When the Issue Price is Payable in Lump Sum:

1. On Receiving Application Money:

Bank A/c                             ...Dr.

   To Shares Application A/c /  Shares Application and Allotment A/c 

(Being the application money received in a lump sum)

Or if a joint account is used:

Bank A/c           ...Dr.

         To Shares Application and Allotment A/c

(Being the application and allotment money received in a lump sum)

2. On Allotment of Shares (Transfer of Application Money):

Shares Application A/c / Shares Application and Allotment A/c    ...Dr.

       To Share Capital A/c

(Being the transfer of application money to share capital on allotment)

Or (if joint account used):

Shares Application and Allotment A/c         ...Dr.

       To Share Capital A/c

(Being the application and allotment money transferred to share capital)

B. When Issue Price is Payable in Instalments:

1. On Receipt of Application Money:

Bank A/c                              ...Dr.

      To Shares Application A/c

(Being the application money received)

2. On Allotment of Shares (Transfer of Application Money):

Shares Application A/c                  ...Dr.

      To Share Capital A/c

(Being application money transferred to share capital on allotment)

3. On Amount Due on Allotment:

Shares Allotment A/c                 ...Dr.

       To Share Capital A/c

(Being allotment money due)

4. On Receipt of Allotment Money:

Bank A/c           ...Dr.

      To Shares Allotment A/c 

(Being the allotment money received)

5. On Amount Due on First Call:

Shares First Call A/c                  ...Dr.

        To Share Capital A/c

(Being the amount due on the first call)

6. On Receipt of First Call Money:

Bank A/c                    ...Dr.

      To Shares First Call A/c

(Being the amount received on the first call)

7. (Optional) On Amount Due on Second Call:

Shares Second Call A/c      ...Dr.

      To Shares Capital A/c

(Being the amount due on the second call)

8. Bank A/c           ...Dr.

       To Shares Second Call A/c

(Being the amount received on the second call)

C. Other Related Entries:

1. For Money Refunded on Rejected Application:

Share Application A/c         ...Dr.

      To Bank A/c

(Being refund of application money on rejected shares)

2. For Adjustment of Excess Application Money towards Allotment:

Share Application A/c         ...Dr.

     To Share Allotment A/c

(Being excess application money adjusted towards allotment)

3. Combined Entry (Refund + Adjustment):

Share Application A/c       ...Dr.

      To Share Allotment A/c

      To Bank A/c

(Being excess application money adjusted and balance refunded)