Question

Nidhi Ltd. issued 2,50,000 Equity Shares of ₹ 10 each to public at par for subscription, amount being payable as application money. Pass necessary Journal entries in the books of the company.

Answer 1

Journal Entries in the Books of Nidhi Ltd.
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
1.	Bank A/c   ...Dr.		25,00,000
	To Shares Application A/c			25,00,000
	(Application money received on 2,50,000 shares @ ₹ 10 per share)
2.	Shares Application A/c   ...Dr.		25,00,000
	To Share Capital A/c			25,00,000
	(Application money transferred to Share Capital)

Working Note:

2,50,000 × ₹ 10 = ₹ 25,00,000

Since the entire amount is payable with the application, no allotment or call entries are required.