Question

Question 6

Taleb Cars Ltd. issued 5,000 shares of $ 30 each at a premium of $ 5 per share, payable as:

On application $ 12 (including $ 2 premium) per share

On allotment $ 13 (including $ 3 premium) per share

On first and final call $ 10 per share

Applications were received for 5,000 shares and allotment was made to all. Ameen, to whom 500 shares were allotted, failed to pay the calls.

The journal entries of application are.

What is the correct answer?

A / B / C / D

	A.	Particulares Dr Cr Particulares Dr Cr Bank             A/c                                              Share Capital   A/c    Securities Premium A/c                            (Amount received for 5,000 shares)                                                       60,000 50,000 10,000 Share Application A/c                       Share Capital A/     Securities Premium A/c                  (Share application money transferred to share capital & securities Premium 60,000 50,000 10,000
	B.	Particulares Dr Cr Particulares Dr Cr Application               A/c                                               Share Capital   A/c                       (Amount received for 5,000 shares)                                                       60,000 60,000 Bank A/c                   Share Capital A/     Securities Premium A/c                  (Share application money transferred to share capital & securities Premium 60,000 50,000 10,000
	C.	Particulares Dr Cr Particulares Dr Cr Bank             A/c                                              Share Application   A/c                (Amount received for 5,000 shares)                                                       60,000 60,000 Share Application A/c                       Share Capital A/     Securities Premium A/c                  (Share application money transferred to share capital & securities Premium 60,000 50,000 10,000
	D.	Particulares Dr Cr Particulares Dr Cr Bank             A/c                                              Share Capital   A/c    Securities Premium A/c                            (Amount received for 5,000 shares)                                                       60,000 50,000 10,000 Application A/c Securities Premium A/C                                   Share Capital A/        (Share application money& securities Premium transferred to share capital 50,000 10,000 60,000

Answer 1

Answer: C

.

Particulars	Debit	Credit
Bank A/c                                                 [Total cash received = 5,000 shares x $12]	$60,000
Share Application A/c		$60,000
(Amount received for 5,000 shares)
Particulars	Debit	Credit
Share Application A/c	$60,000
Share capital A/c                            [Total par value = 5,000 shares x $10]		$50,000
Securities premium A/c                  [In excess of par value = 5,000 shares x $2]		$10,000
(Share application money transferred to share capital & securities Premium)