Question

Sucheta Company Limited issued ₹ 20,00,000 new capital divided into ₹ 100 equity shares at a Premium of  ₹ 20 per share payable as ₹ 10 on Application ₹ 40 on Allotment and ₹ 10 premium ₹ 50 on Final call and ₹ 10 premium.

The issue was oversubscribed to the extent of 26000 equity shares. The applicants on 2000 shares were sent letter of regret and their application money was refunded. Remaining applicants were alloted share on pro-rata basis. All the money due on Allotment and Final call was duly received.

Make necessary Journal entries in the books of Sucheta Company Ltd.

Answer 1

Journal Entries in the books of Sucheta Company Limited
Date	Particulars	L.F	Debit Amount (₹)	Credit Amount (₹)
1	Bank A/c Dr.		2,60,000
	To Equity Share Application A/c			2,60,000
	(Being application money on 26,000 equity shares @ ₹ 10 per share received)
2	Equity Share Application A/c Dr.		20,000
	To Bank A/c			20,000
	(Being application money on 2,000 equity shares @ ₹ 10 per share refunded)
3	Equity Share Application A/c Dr.		2,40,000
	To Equity Share Capital A/c			2,00,000
	To Equity Share Allotment A/c			40,000
	(Being application money on 20,000 equity shares transferred to equity share capital and application money on 2,000 equity shares adjusted against Share Allotment A/c)
4	Equity Share Allotment A/c Dr.		10,00,000
	To Equity Share Capital A/c			8,00,000
	To Share Premium A/c			2,00,000
	(Being allotment money (including premium) on 20,000 equity shares @ ₹ 50 per share due)
5	Bank A/c Dr.		9,60,000
	To Equity Share Allotment A/c			9,60,000
	(Being allotment money on 20,000 equity shares, after adjusting excess application money received)
6	Equity Share Final Call A/c Dr.		12,00,000
	To Equity Share Capital A/c			10,00,000
	To Share Premium A/c			2,00,000
	(Being share final call money (including premium) on 20,000 equity shares @ ₹ 60 per share due)
7	Bank A/c Dr		12,00,000
	To Equity Share Final Call A/c			12,00,000
	(Being share final call money on 20,000 equity shares @ ₹ 60 per share received)
			48,80,000	48,80,000

Working Note :

Calculation of Application money transferred to Share Allotment :

Application money received (26,000 × 10) :	2,60,000
Less: Application money refunded (2,000 × 10) :	20,000
	2,40,000
Less: Application money transferred to Share Capital : (20,000 × 10)	2,00,000
Excess money received on application transferred to Share Allotment:	40,000

 Bifurcation of calls amount :

Per-share value ₹ 100 Premium amount ₹ 20	On Application: ₹ 10 per share
	On Allotment: ₹ 40 per share for Capital + ₹ 10 per share for Premium
	On final call: ₹ 50 per share for Capital + ₹ 10 per share for Premium