Please explain me with Golden rules??

The entries follow the golden rules of accounting, which are:

• Debit what comes in, credit what goes out
• Debit all expenses and losses, credit all incomes and gains
• Debit the receiver, credit the giver.

1. Sanction of issue of bonus shares:

Capital Redemption Reserve A/c Dr. (debit) - represents the amount transferred from profits for the purpose of redeeming share capital

Securities Premium A/c Dr. - represents the amount received in excess of face value of shares issued

General Reserve A/c Dr. - represents the amount transferred from profits to a general reserve fund

Profit and Loss A/c Dr. - represents the amount of profits available for appropriation

Bonus to Shareholders A/c Cr. (credit) - represents the amount of bonus shares to be issued to shareholders.

The above entries are made to account for the appropriation of profits for the purpose of issuing bonus shares to shareholders. All the accounts are debited to reduce the balance of the profit and loss account and to increase the reserves.

2. Issue of bonus shares:

The above entries are made to record the issue of bonus shares to the shareholders. Bonus to shareholders account is debited to reduce its balance and share capital account is credited to increase the share capital.

3. Partly paid to fully paid:

The above entries are made when partly paid shares are converted to fully paid shares through the issue of bonus shares. The accounts are debited to reduce the balance of the profit and loss account and to increase the reserves.

4. Making final call due:

The above entries are made when the final call is due on shares. Share final call account is debited to increase the liability and share capital account is credited when the shareholders pay the final call.

5. Adjustment of final call:

The above entries are made when the final call is adjusted with the bonus shares issued to shareholders. The bonus to shareholders account is debited to reduce its balance and share final call account is credited to reduce the liability.