Question

During its first year of operations, Moon Ltd invited the public to subscribe to the issue of 20,400 shares

for $10 per share:

$4.50 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 $2.50 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

	Moon Ltd   - Journal entries
Date	Particulers	Debit	Credit
1-Jul	Bank A/c         Dr.         (4.5*20400)	91800
	To Share application A/c		91800
1-Jul	Share application   A/c       Dr.	91800
	To Share capital A/c		91800
1-Jul	Share allotment A/c    Dr.   (3*20400)	61200
	To Share capitalA/c		61200
31-Jul	Bank A/c   Dr.	61200
	To Share capital A/c		61200
1-Dec	Share first call A/c       Dr. (2.5*20400)	51000
	To share capital A/c		51000
31-Dec	Bank A/c   Dr.	51000
	To Share first call A/c		51000

Application money first received and than alloted. Allotment money and call money first due than alloted.

a)the application by investors

Date	Particulers	Debit	Credit
1-Jul	Bank A/c         Dr.         (4.5*20400)	91800
	To Share application A/c		91800
1-Jul	Share application   A/c       Dr.	91800
	To Share capital A/c		91800

b) the allotment of shares on 1 July and the receipt of allotment money received by 31 July.

Date	Particulers	Debit	Credit
1-Jul	Share allotment A/c    Dr.   (3*20400)	61200
	To Share capitalA/c		61200
31-Jul	Bank A/c   Dr.	61200
	To Share capital A/c		61200