Question

3,000 shares of ₹10 each were issued to the Promoters for their services at a premium of ₹5 per share. Give Journal entry.

Answer 1

Journal Entry
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Incorporation Expenses A/c     ...Dr.		45,000
	To Share Capital A/c			30,000
	To Securities Premium Reserve A/c			15,000
	(Being 3,000 equity shares of ₹10 each issued at a premium of ₹5 per share to promoters for their services)

Explanation:

• Total value of services = 3,000 shares × ₹15 = ₹45,000

• Face value (Share Capital) = 3,000 × ₹10 = ₹30,000

• Premium (Securities Premium Reserve) = 3,000 × ₹5 = ₹15,000