4 BonusDividend

llustration -Journal entries

Pass jourrial eptries in the following circumstances:
A Limited company with subscribed capital of 5,00,000 consisting of 50,000 Equity shares of
of
R 10cach.
1,25,000declared out of General Reserveto be appliedin
capital
called-up R7.50 pershare. A bonus
making the existing shares fullypaid-up.
ae A Limited company having fully paid-up capital of 50,00,000consisting of Equity
had General Reserve 9,00,000. It was resolved to capitalize 75,00,000
sharesof 10each
of out ofGeneral Reserve by
issuing
50,000 fully paid bonus shares of R10 each, each shareholder to get one such share forevery ten
shares held by him in the
company. IPCC Nov. CA 2018(Old)]
Solution: Books of..
Journal Dr. Cr.
Date Particulars

() Equity Share Final Call A/c .Dr. 1,25,000

To Equity Share
Capital A/c [50,000 x 2.50] 1,25,000
(Berng
final call money due on 50,000 shares @2.50 per share, asper
Board's Resolution No.... dated....)

General Reserve
To Bonus Dividend A/c
A/c Dr 1,25,000
125,000
(Being bonus dividend declared, as per Board sResolution No... dated..
and Shareholders
Resolution No..dated...)
Bonus Dividend A/c Dr. 1,25,000
To
Equity Share Final Call A/c 1,25.000
(Being
final call money due adjusted against bonus dividend, as per Board's
Resolution
No.... dated
 6.13 Corporate Accounting

( General Reserve A/c

ToBonus Dividend

(Beingbonus dividend
A/c
declared, as per Board's Resolution
... Dr.

No... dated....
5,00,000

andShareholders Resolution No... dated.)

BonusDividend Ac
. Dr 5,00,000
ToEquity Share Capital A/c [50,000x 10]
(Being 50,000 Equity shares issued at par as bonus shares, as per SIM
Board's Resolution No... dated. and Shareholders Resolution No....

dated)
llustration 5: Conversionofpartly paid-up shares tofully
paid-1up shares -Issueofbonus ofshe
Prudent utilisation ofreserves andprofit