Company accounting

Journal entries
 It is assumed that : ABC company has 1000000 shares as
authorized capital and issued 200000 shares at 1$ Application
date 1 April to 1 May
 Client A : A applied for 20000 shares and paid 20000 cash and
agreed upon 20000
 Client B : B applied for 100000 shares and paid 30000 cash and
agreed upon 20000
 Client C : C applied for 70000 shares and paid 10000 cash and
agreed upon 40000 and decided to pay 30000 in allotment
 Client D : D applied for 50000 shares and paid 5000 cash and
agreed upon 25000 shares he decided to pay 10000 in
allotment and the remaining as first call
 Client E : E applied for 50000 shares paid 10000 cash and agreed
upon 35000 he decided to pay 10000 in allotment and 5000 as
first call and the remaining as last call
 Journal Entries
Client A
Date Details Debit Credit
Cash a/c
1st April 20000
Application share a/c 20000
Share application a/c
1st May 20000
Share capital a/c 20000

Client B
Date Details Debit Credit
Cash a/c
1st April 30000
Application share a/c 30000
Share application a/c
1st May 20000
Share capital a/c 20000
Share application a/c
1st May 10000
Cash a/c 10000
 Client C
Date Details Debit Credit
Cash a/c
1st April 10000
Application share a/c 10000
Share application a/c
1st May 10000
Share capital a/c 10000
Share allotment a/c
1st May 30000
Share capital a/c 30000
Cash a/c
1st June 30000
Share allotment a/c 30000
 Client D
Date Details Debit Credit
Cash a/c
1st April 5000
Application share a/c 5000
Share application a/c
1st May 5000
Share capital a/c 5000
Share allotment a/c
1st May 10000
Share capital a/c 10000
Cash a/c
1st June 10000
Share allotment a/c 10000
Frist call a/c
1st July 10000
Share capital a/c 10000
Cash a/c
1st July 10000
Frist call a/c 10000
 Client E
Date Details Debit Credit
Cash a/c
1st April 10000
Application share a/c 10000
Share application a/c
1st May 10000
Share capital a/c 10000
Share allotment a/c
1st May 10000
Share capital a/c 10000
Cash a/c
1st June 10000
Share allotment a/c 10000
Frist call a/c
1st July 5000
Share capital a/c 5000
Cash a/c
1st July 5000
Frist call a/c 5000
Last call a/c
1st Aug 10000
Share capital a/c 10000
Cash a/c
1st Aug 10000
Last call a/c 10000
 Basic entries
Details Debit Credit
Cash trust a/c $$$
Share application $$
1 Issue fees $
“to record share application with issue
fees received”
Cash a/c $$$
Cash trust a/c $$$
2
“to close out (transfer) cash trust in
cash”
Share application a/c $$$
Share capital a/c $$$
3
“to raise share capital with share
application”
A: share allotment a/c $$$
share capital a/c $$$
“to record allotment call up”
4
B: cash a/c $$$
share allotment a/c $$$
“to record collection of allotment”
 Details Debit Credit
A: first call a/c $$$
share capital a/c $$$
“to record first call called up”
5
B: cash a/c $$$
first call a/c $$$
“to record collection of first call”
A: last call a/c $$$
share capital a/c $$$
“to record last call called up”
6
B: cash a/c $$$
last call a/c $$$
“to record collection of last call”
 Over subscription
 When we have over subscription we have two options :
 Refunding back to subscribers
Details Debit Credit
share application a/c $$$
cash trust a/c $$$
“to refund back over subscription to
unsuccessful subscribers”

 But we refund the over subscription before we close out

the cash trust account then we close the share
application
 Retain it under future installment
Details Debit Credit
share application a/c $$$$$$$
Share capital a/c $$$
Share allotment a/c $
Frist call a/c $
Second call a/c $
Last call a/c $
“to raise the share capital and retain the
excess under the installment”