Shipping Limited issued 10,000 equity shares of $25 each, payable $5 on application, $10 on allotment, and $10 on first and final call. All the shares are subscribed and the amount duly received. Pass the journal entries. Journal Entries M Limited issued 10,000 equity shares of $10 each payable as to: All money was duly received. Show the necessary journal and cash book entries to record the above transactions. Journal Entries Cash Book Note: In actual practice, cash transactions are not jounalized but are passed through a cash book (bank column). Journal entries are passed only in respect of other transactions. It is also common practice to pass separate entries for equity shares and preference shares. A limited company issued 25,000 ordinary shares of $25 each, payable $5 on application, $10 on allotment, and $5 each on subsequent calls. 20,000 shares were fully subscribed and money dully received. You are required to prepare journal entries, a cash book, and a balance sheet for the company. Journal Entries A company was registered with an authorized capital share of $2,500,000 divided into 10,000 preference shares of $100 each and 15,000 equity shares of $100 each. Out of these, 4,000 preference shares and 8,500 equity shares were issued. These shares were payable as under: All shares were paid in full. You are required to prepare the necessary journal entries, a cash book, and a balance sheet. Journal EntriesQuestion 1: Issue of Shares at Par - Journal
Solution
Question 2: Issue of Shares at Par - Journal and Cash Book
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Question 3: Issue of Shares at Par - Journal, Cash Book, and Balance Sheet
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Question 4: Issue of Two Classes of Shares at Par
Preference Shares
Equity Shares
On Application
20
20
On Allotment
30
40
On First Call
50
40
Solution
Issue of Shares Practical Problems and Solutions FAQs
Generally, allotment of shares (or capitalization) means the issuance of stock certificates to the new shareholders. On the other hand, an issue of shares simply means recording on the account ledger that a specific number of equity or preference shares have been issued to a new shareholder.
You can record the issue of shares by debiting your opening balance "capital work-in-progress" account and crediting it to your opening 'paid-up capital' account.
Issue of shares sums is the total amount a company receives from shareholders when shares are issued.
You can record the issue of shares in the stock book by giving an opening balance as 'capital work-in-progress'.
The limitations of the issue of shares are; shares must be issued for consideration otherwise it would be recorded as an expense, the maximum number of shares that can be allotted to one person or group should not exceed 10% while the minimum number should not be less than 1%, etc.
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