Accounting for Share Capital issue of shares accounting entries part-4.pptx
1. ACCOUNTING FOR SHARE CAPITAL
ISSUE OF SHARE, PROCEDURE & JOURNAL
ENTRY
BY: MS. DIVYA RASTOGI
ASSISTANT PROFESSOR BBA DEPARTMENT
GL BAJAJ INSTITUTE OF ADVANCED STUDIES, GREATER NOIDA U.P
2. TOPICS TO BE COVER:
• Procedure of Issue of Share.
• Journal Entries of Issue of Share
3. • Procedure Of Issue Of Share
Public Company-Register
Initial Public Offer (IPO)
Issue Of Prospectus (Invitation to public to purchase its
share)
Company receive Application with
application money.
Under
Subscript
ion
Full
Subscri
ption
Over
Subscript
ion
Minimum Subscription Check Rejecting Few
Application
Pro Rata
Allotment of Shares (Allotment Money Call)
Make the 1st Calls
IInd & Final Calls
4. ISSUE OF SHARES- EXAMPLE:
• Company generally do not call the whole amount in lumsum. They call in
installments.
• Example Co. required to raise Rs. 1,00,000
• Co. issue 10,000 shares, Rs 10 each share
• Different stages: 3or more stages.
• Application stage- Rs. 2 per share, Amt receive- Rs. 20,000
• Allotment stage- Rs. 2 per share, Amt receive- Rs. 20,000
• Ist call stage- Rs- 3 per share, Amt receive- Rs. 30,000
• IInd and Final call stage- Rs 3 per share, Amt receive- Rs. 30,000.
