Issue of shares for cash in lumpsum

Issue of shares for cash in lumpsum

When shares issued either at par or at premium are payable in single payment, the shares are said to be issued against lumpsum payment.

The following journal entries are passed:

Illustration 19

Sara Company issues 10,000 equity shares of ₹ 10 each payable fully on application.

Pass journal entries if the shares are issued

i.            at par

ii.            at a premium of ₹ 2 per share.

Solution

In the books of Sara Company Journal entries

(i) Issued at par

(ii) Issued at a premium