Issue of shares practical problems and solutions

Question No. 1 (Issue of shares at par – Journal)

Shipping Limited make an issue of 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


Question No. 2 (Issue of shares at Par – Journal and Cash Book)

M Limited issued 10,000 Equity Shares of $10 each payable as to:

  • $2 per share on Application
  • $5 per share on Allotment
  • $3 per share on First and Final Call

All money was dully received. Show the necessary journal and Cash Book entries to record the above transactions.


Journal Entries


Cash Book


Note: It may be noted that in actual practice cash transactions are not jounalised but are passed through Cash Book (Bank Column). Journal entries will be passed only in respect of other transactions. It is also the practice to pass separate entries for Equity Shares and Preference Shares.

Question No. 3 (Issue of shares at Par – Journal, Cash Book, Balance Sheet)

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 give journal entries, Cash Book and Balance Sheet of the Company.


Journal Entries




Question No.4: (Issue of Two Classes of Shares at par)

A Company was registered with an authorised capital share of $25,00,000 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:

Preference Shares Equity Shares
On Application 20 20
On Allotment 30 40
On First Call 50 40

All these shares were paid in full. Make necessary journal entries, Cash Book and Balance Sheet.


Journal Entries




Leave a Comment