The Orient Company Limited offered For Public Subscription 20,000 Equity Shares-Accountancy

The Orient Company Limited offered for public subscription 20,000 equity shares of Rs 10 each at a premium of 10% payable at Rs 2 on application; Rs 4 on allotment including premium; Rs 3 on First Call and Rs 2 on Second and Final call. Applications for 26,000 shares were received. Applications for 4,000 shares were rejected. Pro-rata allotment was made to the remaining applicants. Both the calls were made and all the money were received except the final call on 500 shares which were forfeited. 300 of the forfeited shares were later on issued as fully paid at Rs 9 per share. Give journal entries and prepare the balance sheet.

Books of The Orient Company Limited

Journal

Date	Particulars		L.F	Amount (Dr.)	Amount  (Cr.)
	Bank A/c	Dr.		52,000
	To Equity share Application A/c				52,000
	( Being Application money received on 26,000 shares @ Rs. 2 per share )
	Equity share Application A/c	Dr.		52,000
	To Equity share capital A/c				40,000
	To Equity share Allotment A/c				4,000
	To Bank A/c				8,000
	( Being Application money transferred to Equity share capital for 20,000 shares and 4,000 shares rejected and reaming 2,000 shares adjusted to allotment )
	Equity share Allotment A/c	Dr.		80,000
	To Securities premium A/c				20,000
	To Equity share capital A/c				60,000
	( Being allotment money received for 20,000 shares)
	Bank A/c	Dr.		76,000
	To Equity share Allotment A/c				76,000
	( Allotment money received for all the shares )
	Equity Share First Call A/c	Dr.		60,000
	To Equity share capital A/c				60,000
	( money due on Share First Call for 20,000 shares @ Rs. 3 each )
	Bank A/c	Dr.		60,000
	To Equity Share First Call A/c				60,000
	( Being money received for Share First Call for 20,000 shares )
	Equity Share Second and final Call A/c	Dr.		40,000
	To Equity share capital A/c				40,000
	( money due for Share Second and final Call on 20,000 shares @ Rs.2 each )
	Bank A/c	Dr.		39,000
	To Equity Share Second and final Call A/c				39,000
	( Being money received for 19,5000 shares @ Rs. 2 per each )
	Share Capital A/c	Dr.		5,000
	To share second and final call A/c				1,000
	To share Forfeiture A/c				4,000
	( 500 Shares forfeited for non-payment of share second and final call )
	Bank A/c	Dr.		2,700
	Share Forfeiture A/c	Dr.		300
	To Share Capital A/c				3,000
	(300 shares @ Rs 10 each reissued for Rs 9 per share fully paid-up)
	Share Forfeiture A/c	Dr.		2,100
	To Capital Reserve A/c				2,100
	(Profit on reissue of share transferred to Capital Reserve)

Chapter-1 Accounting for Share Capital-II

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