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2. Handbag Ltd issued 2000 ordinary shares of P5 at an issue price of P8. Payment...

2. Handbag Ltd issued 2000 ordinary shares of P5 at an issue price of P8. Payment for the shares was made as follows: On application P2, on allotment P4 (including share premium), on first call P1 and on second call P1. Applications were received for 2000.All the instalments were received on due dates. Prepare relevant accounts to record the above issue of shares.

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Expert Solution

Account title Dr(P) Cr(P)
Bank Account (P2 x 2000 shares)          4,000
          Share application a/c          4,000
(Being received the aplication money at P2 per share for 2000 shares)
Share application a/c          4,000
          Share capital a/c          4,000
(Being transfer of share application money for 2000 shares to share capital)
Share allotment a/c (P4 x 2000 shares)          8,000
          Share capital a/c (P3 x 2000 shares)          6,000
          Share premium a/c (P1 x 2000 shares)          2,000
(Being allotment oney due)
Bank Account          8,000
          Share allotment a/c          8,000
(Being Allotment money received)
Share first call a/c (P1 x 2000 shares)          2,000
          Share premium a/c          2,000
(Being first call made due)
Bank Account          2,000
          Share first call a/c          2,000
(Being first call money received)
Share second and final call a/c (P1 x 2000 shares)          2,000
          Share premium a/c          2,000
(Being second call made due)
Bank Account          2,000
          Share second and final call a/c          2,000
(Being second call money received)

ekkarill92 answered 8 months ago
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