What is the journal entry for share capital?

What is the journal entry for share capital?

Solution:

Particulars Debit Credit
Share first & final call Dr. To share capital To security premium 69,000 46,000 23,000
Bank A/c Dr. To share first call 69,000 69,000
Share second & final call Dr. To share capital A/c To security premium 46,000 23,000 23,000
Bank A/c Dr. To share second & final call 46,000 46,000

How do you record a journal entry for capital?

When you record the journal, you enter the capital introduced as a credit and post the opposite debit entry to the nominal ledger account you want to affect.

Is share capital credited or debited?

The company debits the Share Capital Account with the amount called-up up to the date of forfeiture on shares. It credits the Shares Allotment Amount or Shares Call Account with amount called-up on forfeited shares but due from the shareholders.

How do you record called up share capital?

The amount of share capital that shareholders owe to the company is called “called up capital”….Called Up Capital Example.

Account Debit Credit
Receivable 300,000
Cash 200,000
Common stock 100,000
Additional paid-in capital 400,000

Is a share capital an asset?

No, equity share capital is not an asset. But the investor who buys equity shares of the company brings in cash in exchange for the shares given. This increases the assets of the company. Equity shares can also be issued to vendors in the exchange of the supplies or raw material provided by them.

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Why share capital account is credited?

A debit to a capital account means the business doesn’t owe so much to its owners (i.e. reduces the business’s capital), and a credit to a capital account means the business owes more to its owners (i.e. increases the business’s capital).

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