Issue of shares at premium and discount – practical problems with answers

Issue of shares at Premium – Practical Problem with answer

Asian Ltd. issued 5,000 Preference Share of $10 each at a premium of $4 per share, payable $1 per share on application; $6 per share on allotment including premium; 3 per share on first call and $4 per share on final call. The shares were all subscribed and money was duly received.

Give the journal and Cash Book entries and Balance Sheet.

Solution

Journal Entries

Cash Book

Balance Sheet

Issue of Shares at Discount – Practical Problem with Answer

Illustration

An existing Company offered 20,000 Equity Shares of $10 each at a discount of 5%. The shares were payable as under:

Public applied for 16,000 shares and shares have been allotted. All the money was received. Pass entries in the journal and Cash Book and show the Balance Sheet.

Solution

Journal Entries

Cash Book

Balance Sheet