Question

X Ltd. issued 20,000, 7% Preference shares of ₹100 each at a premium of 6%. Payments were to be made as - ₹25 on Application; ₹46 on Allotment, ₹10 on First call and ₹25 on Final Call.
The applications for 18,000 shares were received and all were accepted. All the money was duly received except the first and final call on 100 shares.
Give the necessary Journal Entries and prepare Cash Book of the Company. Also give the Opening Balance Sheet of the Company.

Answer 1

Journal entries In the books of X Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c     ...Dr.		4,50,000
	To Preference Share Application A/c			4,50,000
	(Application money received on 18000 shares @₹25 per share)
2.	Preference Share Application A/c     ...Dr.		4,50,000
	To 7% Preference Share Capital A/c			4,50,000
	(Application money transferred to share capital account)
3.	Preference Share Allotment A/c     ...Dr.		8,28,000
	To 7% Preference Share Capital A/c			7,20,000
	To Securities Premium A/c			1,08,000
	(Allotment made due on 18000 shares @₹46 per share including premium)
4.	Bank A/c     ...Dr.		8,28,000
	To Preference Share Allotment A/c			8,28,000
	(Allotment money received)
5.	Preference Share First Call A/c     ...Dr.		1,80,000
	To 7% Preference Share Capital A/c			1,80,000
	(First call made due on 18000 shares @₹10 per share)
6.	Bank A/c     ...Dr.		1,79,000
	Calls in Arrears A/c     ...Dr.		1000
	To Preference Share First Call A/c			1,80,000
	(First call money received on 17900 shares)
7.	Preference Share Second and Final Call A/c     ...Dr.		4,50,000
	To 7% Preference Share Capital A/c			4,50,000
	(Second call made due on 18000 shares @₹25 per share)
8.	Bank A/c     ...Dr.		4,47,500
	Calls in Arrears A/c     ...Dr.		2500
	To Preference Share Second and Final Call A/c			4,50,000
	(Second and final call money received on 17900 shares)