Question

On October 1, 2023, XLtd. offered 1,00,000 shares of ₹10 each payable as follows:

On Application	₹3 per share
On Allotment (November 1, 2023)	₹2 per share
On First Call (December 1, 2023)	₹3 per share
On Second and Final Call (One month after first call)	₹2 per share

Applications were received for 1,25,000 shares on October 15, 2023. Applications for 1,20,000 shares were allotted 1,00,000 shares and the remaining applications were rejected.
Give journal entries assuming that all amounts have been received and the company maintains a combined account of application and allotment.

Answer 1

Journal Entries in the Books of X Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
15.10.2023	Bank A/c     ...Dr.		3,75,000
	To Share App. & Allotment A/c			3,75,000
	(Application money received for 1,25,000 shares @ ₹3)
01.11.2023	Share App. & Allotment A/c     ...Dr.		5,00,000
	To Share Capital A/c (₹5 × 1,00,000)			5,00,000
	(Combined application and allotment money transferred to share capital)
01.12.2023	Share First Call A/c     ...Dr.		3,00,000
	To Share Capital A/c			3,00,000
	(First call due on 1,00,000 shares @ ₹3)
01.12.2023	Bank A/c     ...Dr.		3,00,000
	To Share First Call A/c			3,00,000
	(First call money received)
01.01.2024	Share Second & Final Call A/c     ...Dr.		2,00,000
	To Share Capital A/c			2,00,000
	(Second and final call due on 1,00,000 shares @ ₹2)
01.01.2024	Bank A/c     ...Dr.		2,00,000
	To Share Second & Final Call A/c			2,00,000
	(Second and final call received)

Working Note:

1) Total Application Money Received: 1,25,000 × ₹3 = ₹3,75,000

2) Allotment made to 1,20,000 applicants → 1,00,000 shares

3) Money due (combined app & allotment): ₹5 per share × 1,00,000 = ₹5,00,000

• Application received: ₹3.75 lakh

• Allotment adjustment: ₹1.25 lakh