Page 29 - Ebook Financial Accounting 3

Journal entries:

Receipt of application money
Item Dr Cr

Bank XXX

Application XXX
(Amount received on application)

Application XXX
Ordinary Share Capital XXX

(Application money transferred to share capital)

a) Receipt of allotment money

Item Dr Cr
Bank XXX

Allotment XXX

(Amount received on allotment)

b) On use of surplus application money as allotment money (pro-rata basis)

Item Dr Cr
Application XXX

Allotment XXX
(Transfer surplus money on application to

allotment)

c) On calls

Item Dr Cr

Calls XXX
Ordinary Share Capital XXX

(Calls allotment of shares)

23