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Solution - Issue at Par and Premium and at Discount

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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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To provide employment to the youth and to develop Baramula district of Jammu and Kashmir, Jyoti Power Ltd. decided to setup a power plant. For raising funds the company decided to issue 8,50,000 equity shares of Rs.10 each at a premium of Rs.3 per share. The whole amount was payable on application. Applications for 20,00,000 shares were received. Applications for 3,00,000 shares were rejected and shares were alloted to the remaining applicants on pro- rata basis.

Pass necessary journal entries for the above transactions in the books of the company and identify any two values which the company wants to propagate.

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K Ltd. took over the assets of Rs.15,00,000 and liabilities of Rs.5,00,000 of P Ltd. For a purchase consideration of Rs.13,68,500. Rs.25,500 were paid by issuing a promissory note in favour of P Ltd. Payable after two months and the balances was paid by issue of equity shares of Rs.100 each at a premium of 25%.

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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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SK Ltd. invited applications for issuing 3,20,000 equity shares of Rs.10 each at a premium of Rs.5 per share. The amount was payable as follows:

On application Rs.3 per share (including premium Rs.1 per share)

On allotment Rs.5 per share (including premium Rs.2 per share)

On First and Final Call - Balance

Applications for 4,00,000 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. Jeevan holding 800 shares failed to pay the allotment money and his shares were immediately forfeited. Afterwards final call was made. Ganesh who had applied for 2,700 shares failed to pay the final call. His shares were also forfeited. Out of the forfeited shares 1,500 shares were re-issued at Rs.8 per share fully paid up. The re-issued shares included all the forfeited shares of Jeevan.

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

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

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

 

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Solution for concept: Issue at Par and Premium and at Discount. For the courses 12th CBSE (Arts), 12th CBSE (Commerce), 12th CBSE (Science)
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