Question

Citizen Watches Ltd. invited applications for 50,000 shares of ₹ 10 each payable ₹ 3 on application, ₹ 4 on allotment, and balance on first and final call. Applications were received for 60,000 shares. Applications were accepted for 50,000 shares and remaining applications were rejected. All calls were made and received except First and Final call on 500 shares. Pass the journal entries in the books of Citizen Watches Ltd.

Answer 1

Journal Entries
Date	Particulars	L.F.	Debit Amount (₹)	Credit Amount (₹)
1.	Bank A/c (60,000 × 3)   ...Dr.		1,80,000
	To Share Application A/c			1,80,000
	(Received application money on 60,000 shares)
2.	Share Application A/c   ...Dr.		1,80,000
	To Share Capital A/c (50,000 × 3)			1,50,000
	To Bank A/c (10,000 × 3)			30,000
	(Transfer of application money to Share Capital)
3.	Share Allotment A/c (50,000 × 4)   ...Dr.		2,00,000
	To Share Capital A/c			2,00,000
	(Allotment due on 50,000 shares)
4.	Bank A/c   ...Dr.		2,00,000
	To Share Allotment A/c			2,00,000
	(Allotment received)
5.	Share First and Final Call A/c (50,000 × 3)   ...Dr.		1,50,000
	To Share Capital A/c			1,50,000
	(Call money due on 50,000 shares)
6.	Bank A/c (50,000 − 500 = 49,500 × 3)   ...Dr.		1,48,500
	Call in arrels A/c (500 × 3)  ...Dr.		1,500
	To Share First and Final Call A/c			1,50,000
	(Received call money on 49,500 shares)