# Solution - Issue at Par and Premium and at Discount

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#### Question

B' Ltd. took over the assets of Rs.14,00,000 and liabilities of Rs.4,00,000 of C Ltd. for a purchase consideration of Rs.9,19,000. Rs.17,000 were paid by a bank draft in favour of C Ltd. and the balance was paid by issue of equity shares of Rs.10 each at a premium of 10% in favour of C Ltd.

Pass necessary journal entries for the above transactions in the books of B Ltd.

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#### Similar questions

JS Ltd. invited applications for issuing 80,000 equity shares of Rs.10 each at a premium of Rs.6 per share. The amount was payable as follows:

On application - Rs.4 per share (including premium Rs.1 per share)

On Allotment - Rs.6 per share (including premium Rs.3 per share)

On First and Final Call — Balance

Applications for 1,60,000 shares were received. Applications for 40,000 shares were rejected and application money refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess money received with applications was adjusted towards sums due on allotment. Raman holding 400 shares failed to pay the allotment money. His shares were forfeited immediately after allotment. Afterwards the final call was made. Veer who had applied for 1,200 shares failed to pay the final call. His shares were also forfeited. Out of the forfeited shares 500 shares were re-issued at Rs.8 per share fully paid-up. The re-issued shares included all the forfeited shares of Raman.

Pass necessary journal entries for the above transactions in the books of J.S. Ltd.

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Samachar India Ltd. took over the assets of Rs 14,00,000 and liabilities of Rs 4,00,000 from News Ltd. for a purchase consideration of Rs 9,19,000. Samachar India Ltd. issued a promissory note of Rs 17,000 payable after 60 days in favour of News Ltd. and the balance amount was paid by issue of equity shares of Rs 100 each at a premium of Rs 25 per share.

Pass necessary Journal entries for the above transactions in the books of Samachar India Ltd.

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If shares are issued at its face value, it is called as issue at

(b) discount.
(c) par.
(d) none of these.

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What do you mean by ‘issue of shares at premium’?

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RS Ltd. has issued 25000 equity shares of Rs. 10 each at a premium of Rs. 2 per hares payable with application money. The incomplete journal entries related to the issue are given below. You are required to complete these blanks.

Books of RS Ltd.

Journal

 Date Particulars L.F. Dr.(Rs.) Cr.(Rs.) 2015Jan 10 _ _ _ _ _ _ _ _ _ _ _                                                                                                                 Dr             To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _(Amount received on application for 35,000 shares @ Rs.5 per share) Jan 16 _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ _                                                                                            Dr                  To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _                  To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _                  To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _                  To _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _(Transfer of application money to share capital securities premium, money refunded for 4,000 shares for rejected application and balance adjusted towards amount due on allotment as shares were allotted on Pro-rata basis) Jan 31 _ _ _ _ _ _ _ _ _ _                                                                                                                     Dr                 To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _(Amount due on allotment @ Rs.4 per share) Feb 20 _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _                                                                                              Dr                   To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _(Balance amount received on allotment) April 01 _ _ _ _ _ _ _ _ _                                                                                                                        Dr                 To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _(First and Final Call money due) April 20 _ _ _ _ _ _ _ _ _ _                                                                                                                     DrCalls – in – arrears A/c                                                                                                               Dr              To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _(Money received on First and Final Call except on 500 shares) Aug 27 _ _ _ _ _ _ _ _ _                                                                                                                        Dr               To _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _               To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _(Forfeited the shares on which call money was not received) Oct 3 _ _ _ _ _ _ _ _ _ _                                                                                                                     Dr_ _ _ _ _ _ _ _ _ _                                                                                                                     Dr               To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _(Re-issued the forfeited shares @ 8 per share fully paid - up) _ _ _ _ _ _ _ _ _ _ _ _ _ __                                                                                                                      Dr              To _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _(_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ __ )
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