a private limited company having authorised capital of 1 lac with 10000 shares...has raised funding of 1 crore by giving 5 pcnt equity.
now how to enter the funds received in books of accounts...and how to make share transfer agreement as our shares are of only 500 of rs 10(5% of 10000). which is 5000 rs ...but amount received is 1 crore...do we need to increase the authorised capital or issue share on premium.
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Valuation of shares for funding
Replies (2)
You can not issue shares more than Authorised share capital , So First you have to increase your Authorised Share capital .
The face value of the shares is Rs. 10. So total shares to be transferred is of face value of Rs. 5000/-. The balance amount received being Rs. 99,95,000/- (1crore-5000) can be transferred to securities premium account.
Entry in books of accounts will be:
Bank A/c Dr. Rs. 1,00,00,000/-
To Equity capital A/c Rs. 5000/-
To Securities premium A/c Rs. 99,95,000/-
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