Question

Deepak Manufacturing co. Ltd. issued a prospectus inviting applications for 1,00,000 equity shares of ₹ 10 each payable as follows

₹ 2 on Application

₹ 4 on Allotment

₹ 2 on first call

₹ 2 on final call

Application were received for 1,20,000 equity shares. The Directors decided to reject excess applications and refunded application money on that. Company received all money.

Pass Journal Entries in the books of a company.

Answer 1

Journal Entries in the books of Deepak Manufacturing Co. Ltd.
Date	Particulars	L.F	Debit Amount (₹)	Credit Amount (₹)
1	Bank A/c Dr.		2,40,000
	To Equity Share Application A/c			2,40,000
	( Being equity share application money on 1,20,000 shares @ ₹ 2 per share received)
2	Equity Share Application A/c Dr.		2,00,000
	To Equity Share Capital A/c			2,00,000
	( Being application money on 1,00,000 shares transferred to equity share capital account)
3	Equity share Application A/c Dr.		40,000
	To Bank A/c			40,000
	( Being application money on excess 20,000 shares @ ₹2 per share refunded)
4	Equity Share Allotment A/c Dr		4,00,000
	To Equity Share Capital A/c			4,00,000
	( Being equity share allotment money on 1,00,000 shares @ ₹4 per share due)
5	Bank A/c Dr.		4,00,000
	To Equity Share Allotment A/c			4,00,000
	( Being allotment money on 1,00,000 shares @ ₹4 per share received)
6	Equity Share First Call A/c Dr.		2,00,000
	To Equity Share Capital A/c			2,00,000
	( Being equity share first call money on 1,00,000 shares @ ₹2 per share due)
7	Bank A/c Dr.		2,00,000
	To Equity Share First Call A/c			2,00,000
	( Being equity first call money on 1,00,000 shares @ ₹2 per share received)
8	Equity Share Final Call A/c Dr.		2,00,000
	To Equity Share Capital A/c			2,00,000
	( Being equity share final call money on 1,00,000 shares @ ₹2 per share due)
9	Bank A/c Dr.		2,00,000
	To Equity Share Final Call A/c			2,00,000
	( Being equity share final call money on 1,00,000 shares @ ₹ 2 per share received)
			2080000	2080000