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Journal entries for issue of shares for cash
Accountancy
Sir, Explain this concept briefly.
Answers (4)
To simplify entries, your can use a single Share Application and Allotment Account instead of two separate accounts for the first two stages of a share issue. First, when application money is received, you debit the Bank A/c and credit this share app & allotment account. Upon allotment, transfer the total application and allotment amount due to Share Capital by debiting the account. When the pending allotment balance is received, you again debit Bank A/c and credit this account
CA Suraj Lakhotia Admin
To simplify entries, your can use a single Share Application and Allotment Account instead of two separate accounts for the first two stages of a share issue. First, when application money is received, you debit the Bank A/c and credit this share app & allotment account. Upon allotment, transfer the total application and allotment amount due to Share Capital by debiting the account. When the pending allotment balance is received, you again debit Bank A/c and credit this account
Would suggest to use separate application and allotment account in case you are getting confused.
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