Page 335 - VIRANSH COACHING CLASSES

Solution:
Journal Entries in the Books of Archana Ltd.

Date Particulars L.F. Debit ` Credit `
1. Bank A/c ............................................................Dr. 24,000
To Share Application A/c 24,000
(Being application money on 8,000 shares @ ` 3 per
share received)
2. Share Application A/c .........................................Dr. 24,000
To Share Capital A/c 24,000
(Being application money on 8,000 shares @ ` 3 per
share transferred to share capital A/c)
3. Share Allotment A/c ............................................Dr. 40,000
To Share Capital A/c 24,000
To Share Premium A/c 16,000
(Being allotment money on 8,000 shares @ ` 5 per
share due)
4. Bank A/c ............................................................Dr. 41,600
To Share Allotment A/c 40,000
To Calls in Advance A/c 1,600
(Being share allotment money on 8000 equity shares
@ ` 5 per share & share First & Final call money on
400 shares @ ` 4 per share received)
5. Share First and Final Call A/c ............................Dr. 32,000
To Share Capital A/c 32,000
(Being share First & Final Call Money on 8000 shares
@ ` 4 per share due)
6. Bank A/c ............................................................Dr. 30,400
Calls in Advance A/c ..........................................Dr. 1,600
To Share First & Final Call A/c 32,000
(Being share First & Final call on 7600 shares @ ` 4
per share received & on 400 shares adjusted)
8.2.6 Issue of Shares for Consideration other than Cash
A company can issue its shares for cash or for consideration other than cash. Such as against
purchase of Land & Building, Plant & Machinery etc. The company purchase certain assets from
vendors (sellers or suppliers) on credit. Instead of making payment to vendors in cash, the company
issues them certain agreed number of shares at the agreed rate at a consideration of assets purchased.
Journal Entries-

1. Purchase of Asset on Credit
Assets A/c Dr.
To Vendor A/c
(Being Asset purchased from the vendor)

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