GENERAL JOURNAL

Description DEBIT CREDIT

1 Subscription Receivable 1,250,000
Subscribed Share Capital 1,250,000
To record Subscription of 25% share at par value

2 Cash 312,500
Subscription Receivable 312,500
Incorporators paid 25% on their subscription

Subscribe Share Capital 312,500

Original Share Capital 312,500
Subscibed share capital transfer to original up to
the amount reeceived

3 Cash 562,500
Subscription Receivable 562,500
Remaining amount received on 15,000 shares
subscribe by the share holder

Subscribed Share Capital 562,500

Original Share Capital 562,500
Subscribed share capital transfer to original share
capital upto the amount received

4 Land 600,000
Original Share Capital 500,000
Share Premium 100,000
To record issuance of 10,000 shares for land
with a fair value of 600,000

5 Cash 300,000
Original Share Capital 250,000
Share Premium 50,000
To record cash subscription to 5,000 shares at 60 per share

6 Legal Expense 100,000

Original Share Capital 100,000
To record issuance of 2,000 shares for payment to legal
councel

Memorandum Method
Statement of Financial Position
Share Capital 900,000
Subscribed Share Capital 1,250,000
Subscription Receivable -375,000
Share Premium 100,000
Shareholder Equity 1,875,000
 GENERAL JOURNAL
Description DEBIT CREDIT
1 Unissued ordinary share capital 10,000,000
Authorized ordinary share capital 10,000,000
To record authorization to issue 100,000
shares at 100 par

2 Subcription Receivable 2,500,000

Subscribed Ordinary Capital 2,500,000
To record subscription of 25% shares at par

3 Cash 625,000
Subscription Receivable 625,000
To record collection of 25% of the subscription

4 Cash 750,000
Subscription Receivable 750,000
To record full payment of 10,000 shares

5 Subscribed ordinary share capital 1,000,000

Unissued ordinary share capital 1,000,000
To record issuance of fully paid shares

6 Land 800,000
Building 2,500,000
Unissued ordinary share capital 3,000,000
Share Capital 300,000
To record issuance of land and building

7 Bank Loan Payable 1,300,000

Accrued Interest 200,000
Unissued ordinary share capital 1,000,000
Share premium 200,000
Gain on extinguishment 300,000
To record issuance of Bank Loan at 120 per share

8 Income summary 3,000,000

Retained earnings 3,000,000
To record net income for the year

JOURNAL ENTRY METHOD

Statement of Financial Position
Authorized Share Capital 10,000,000
Unissued Share Capital 5,000,000
Subscribed Share Capital 1,500,000
Subscriptions Receivable -1,125,000
Share Premium 500,000
Retained Earnings 3,300,000
Shareholders Equity 19,175,000