Journal Entry - Issue of shares at par
This query is : Resolved
armchairca
(Querist)
18 April 2010
On receipt of application money:
BANK A/C.......DR
SHARE APPLICATION A/C......CR
while I understand that bank a/c has been debited because it has received money whats confusing is why has share application a/c been credited.
BANK A/C.......DR
SHARE APPLICATION A/C......CR
while I understand that bank a/c has been debited because it has received money whats confusing is why has share application a/c been credited.
18 April 2010
AT THE TIME OF SHARE APPLICATION MONEY RECD YOU HAVE MADE CORRECT ENTRY.
BANK A/C DR
SHARE APPLICATION MONEY A/C CR.
SHARE APPLICATIO MONEY A/C IS TO BE CREDITED BECAUSE IT IS LIABIITY OF COMPANY UNTIL UNLESS WE HAVE NOT ISSUE SHARE CAPITAL TO APPLICANT.
AT THE TIME OF ISSUE OF SHARE AT PAR , ENTRY WILL BE AS FOLLOW :
SHARE APPLICATION A/C DR.
SHARE CAPTIAL A/C CR
AT THE TIME OF SHARE APPLICATION MONEY RECD YOU HAVE MADE CORRECT ENTRY.
BANK A/C DR
SHARE APPLICATION MONEY A/C CR.
SHARE APPLICATIO MONEY A/C IS TO BE CREDITED BECAUSE IT IS LIABIITY OF COMPANY UNTIL UNLESS WE HAVE NOT ISSUE SHARE CAPITAL TO APPLICANT.
AT THE TIME OF ISSUE OF SHARE AT PAR , ENTRY WILL BE AS FOLLOW :
SHARE APPLICATION A/C DR.
SHARE CAPTIAL A/C CR
Message likes :
1 times
18 April 2010
AGREE WITH MR. BANSAL.
kartik_somu
(Expert)
18 April 2010
agree with experts
CMA Arif Farooqui
(Expert)
26 April 2010
agree with experts
Venkat Rao Marella
(Expert)
25 May 2010
It should be credited to Share application money because the money is not taking the character of share capital unless share are allotted against the money. So till the time u allot shares in a board meeting alloting shares to the applicant, that remains only application money.
Ramanananda
(Expert)
01 November 2010
well said... by Mr bijender and venkat rao
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