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M.248 An Aid to Accountancy—CBSE XII

17. JOURNAL

Date Particulars L.F. Dr. (`) Cr. (`)
Land and Building A/c ...Dr. 20,00,000
To M/s Jain Brothers 20,00,000
(Being the land and building acquired)
M/s Jain Brothers ...Dr. 20,00,000
To Equity Share Capital A/c 10,00,000
To Securities Premium Reserve A/c 10,00,000
(Being 1,00,000 Equity Shares of ` 10 each issued at 100% premium)
Incorporation Cost/Expenses A/c ...Dr. 1,00,000
To Promoters’ A/c 1,00,000
(Being the amount due to promoters)

Promoters’ A/c ...Dr. 1,00,000
To Equity Share Capital A/c 1,00,000
(Being the Issue of 10,000 shares to promoters against their dues)
Bank A/c ...Dr. 45,00,000
To Equity Shares Application and Allotment A/c 40,00,000
To Preference Shares Application and Allotment A/c 5,00,000
(Being the application money received by 2,00,000 Equity Shares
and 50,000 preference shares)
Equity Shares Application and Allotment A/c ...Dr. 40,00,000
To Equity Share Capital A/c 20,00,000
To Securities Premium Reserve A/c 20,00,000
(Being application and allotment money for Equity Shares adjusted)
Preference Shares Application and Allotment A/c ...Dr. 5,00,000
To 12% Preference Share Capital A/c 5,00,000
(Being application and allotment money for preference shares adjusted)
Underwriting Commission A/c ...Dr. 90,000
To M/s Gupta Brothers 90,000
(Being underwriting commission due to underwriters)
M/s Gupta Brothers ...Dr. 90,000
To Equity Share Capital A/c 90,000
(Being the issue of equity shares at par to underwriters)
Or
(a) Pro rata Allotment means allotting shares or debentures to applicants in the ratio
of total number of shares offered to the total number of shares applied.
(b) The need for a pro rata allotment arises in case of oversubscription of shares,
i.e., when the number of shares applied for is more than the number of shares
offered by the company.
(c) Reissue of shares is merely a sale of forfeited shares and not an allotment of shares.
(d) Gain on reissue of forfeited shares is transferred to Capital Reserve Account.