SS2 Second Term Financial Accounting Lesson Note – Issue of shares: Application; Allotment and Call Accounts

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WEEK 9        

TOPIC:  Issue of shares (d) Application, allotment, and call accounts (e) share premium

CONTENT:  1. Preparation of issue of shares with share premium

Illustration 1.

Kalat Ltd. Issued 200,000 ordinary shares of N1.00 each at N1.20 per share payable as follows:

25k per share on application

40k per share on Allotment (including premium)

35k per share on first call

20k per share on second and final call.

Show the ledger accounts to record the above transactions.

Solution                                  

Kalat Ltd.

Dr                                                              Bank account                                            Cr

N Application                                           50,000 Allotment                                              80,000 Ist call                                                     70,000 2nd call                                                     40,000 240,000 Balance b/d                                         240,000

N Balance c/d                                           240,000       240,000

Dr

Application & Allotment Account

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