Question

Light Lamps Ltd. issued 50,000 shares of ₹ 10 each as fully paid-up to the promoters for their services to set-up the company. It also issued 5,000 shares of ₹ 10 each credited as Fully Paid-up to the underwriters of shares for their services. Journalise these transactions.

Answer 1

Journal Entries in the Books of Light Lamps Ltd.
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
1.	Goodwill A/c   ...Dr.		5,00,000
	To Share Capital A/c			5,00,000
	(50,000 shares of ₹ 10 each issued as fully paid-up to promoters for their services)
2.	Underwriting Commission A/c   ...Dr.		50,000
	To Share Capital A/c			50,000
	(5,000 shares of ₹ 10 each issued as fully paid-up to underwriters for their services)

Working Note:

Shares issued to promoters:

50,000 × ₹ 10 = ₹ 5,00,000

Shares issued to underwriters:

5,000 × ₹ 10 = ₹ 50,000​