Journal entry in the case of Non Listed Company

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Daya (Querist)
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04 January 2025 How to make journal entry for shares purchased in non listed company
when Paid Rs. 10 Cr. on dated 12/12/24
and when to alloted of shares how to make journal entry and also which date share alloted how to know.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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12 August 2025 1. When you pay Rs. 10 Cr for shares (say, on 12/12/2024):
Since you have paid money to purchase shares but shares are not yet allotted, this is treated as Advance for Shares or Share Application Money.

Journal Entry on 12/12/2024 (payment made):

Account Debit (Dr) Credit (Cr)
Share Application Money A/c 10,00,00,000
Bank A/c 10,00,00,000

Explanation: Paid advance money to non-listed company for shares.

2. When shares are allotted, you need to transfer the amount from Share Application Money to Share Capital account.
Journal Entry on Date of allotment:

Account Debit (Dr) Credit (Cr)
Share Application Money A/c 10,00,00,000
Share Capital A/c 10,00,00,000

Explanation: On allotment of shares, application money is converted to share capital.

3. How to know the date of allotment?
The date of allotment is typically the date on which the company’s Board of Directors passes the resolution approving the allotment of shares.

It is also the date mentioned in the allotment letter or share certificate issued to the shareholder.

You can ask the issuing company to provide the official allotment letter or share certificate with the allotment date mentioned.

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