Question

Jupiter Ltd. issued 50,000 shares of ₹10 each payable as follows:

₹2.50 on Application	payable on 1st June, 2023
₹2.50 on Allotment	payable on 1st Aug., 2023
₹2.00on1st Call	payable on 1st Dec., 2023
₹3.00 on IInd & Final Call	payable on 1st March, 2024

Applications were received for 1,00,000 shares and the allotments were made as under:

Number of Shares Applied	Number of Shares Allotted
42,000	42,000
30,000	8,000
28,000	Nil

Excess money received on application was utilised towards allotment and subsequent calls. Interest on Calls in advance was paid @12% p.a.

Give journal entries, assuming all sums due were received and the company closes its books on 31^st March every year.

Answer 1

Journal entries In the books of Jupiter Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
01.06.2023	Bank A/c     ...Dr.		2,50,000
	To Share Application A/c			2,50,000
	(Application money received on 1,00,000 shares @ ₹2.50)
01.08.2023	Share Application A/c     ...Dr.		2,50,000
	To Share Capital A/c (50,000 × ₹2.50)			1,25,000
	To Calls in Advance A/c			1,25,000
	(Application money adjusted and excess treated as Calls in Advance)
01.08.2023	Share Allotment A/c     ...Dr.		1,25,000
	To Share Capital A/c			1,25,000
	(Allotment money due on 50,000 shares @ ₹2.50)
01.08.2023	Calls in Advance A/c     ...Dr.		20,000
	Bank A/c     ...Dr.		1,05,000
	To Share Allotment A/c			1,25,000
	(Allotment money received and excess from application adjusted)
01.12.2023	Share First Call A/c     ...Dr.		1,00,000
	To Share Capital A/c			1,00,000
	(First call due on 50,000 shares @ ₹2)
01.12.2023	Bank A/c     ...Dr.		84,000
	To Share First Call A/c			84,000
	(First call money received; balance adjusted from advance)
01.03.2024	Share Second & Final Call A/c     ...Dr.		1,50,000
	To Share Capital A/c			1,50,000
	(Second and final call due on 50,000 shares @ ₹3)
01.03.2024	Bank A/c     ...Dr.		1,31,000
	To Share Second & Final Call A/c			1,31,000
	(Second and final call money received)
31.03.2024	Interest on Calls in Advance A/c     ...Dr.		1,970
	To Bank A/c			1,970
	(Interest paid on Calls in Advance @ 12% p.a.)

Working Notes:

1) Total shares issued: 50,000

2) Applications received: 1,00,000

3) Allotment made as:

• 42,000 shares: full allotment

• 30,000 shares: allotted 8,000 shares (pro-rata = 30,000:8,000 or 3.75:1)

• 28,000 shares: no allotment

4) Excess Application Money:

• On 30,000 shares: ₹75,000 received; only ₹20,000 (8,000 × ₹2.50) used
• Excess = ₹55,000; ₹25,000 adjusted in allotment; rest in calls

5) Interest on Calls in Advance:

• Adjusted on First and Second call for 8,000 shares

• First Call in advance: ₹16,000 for 3 months (Sept–Nov) → ₹480

• Second Call in advance: ₹24,000 for 7 months (Sept–March) → ₹1,490

• Total Interest = ₹480 + ₹1,490 = ₹1,970