Question

During its first year of operations, Moon Ltd invited the public to subscribe to the issue of 18,100 shares
for $10 per share:
	$4.70	payable on application
	$3.00	on allotment
Applications closed and shares were allotted on 1 July. All allotment money was received by 31 July.
The remaining capital of $2.30 per share is called on 1 December and all call money was received by 31 December.

Required
Journalise the transactions to record:
a) the application by investors
b) the allotment of shares on 1 July and the receipt of allotment money received by 31 July.
(Enter debit entries first followed by credit entries.Please include Dr and Cr as appropriate. Narrations are not required).

Answer 1

The Journal entries to be passed for part a) and part b) are given below:

	Date	Journal Entry and Narration & Explanation	Debit	Credit
a)		Bank a/c                                                                                                                                    Dr.	$     85,070.00
		To Share Application a/c		$      85,070.00
		(Being application money received on 18,100 shares at $4.70 per share)
b)	1-Jul	Share Application a/c Dr.	$     85,070.00
		To Share Capital a/c		$      85,070.00
		(Being the transfer of application money on 18,100 shares to share capital account on allotment)
b)	1-Jul	Share Allotment a/c Dr.	$     54,300.00
		To Share Capital a/c		$      54,300.00
		(Being the amount due on 18,100 share at $3.00 per share)
b)	31-Jul	Bank a/c                                                                                                                                      Dr.	$     54,300.00
		To Share Allotment a/c		$      54,300.00
		(Being allotment amount received)