Answer: Preference Share Capital of ₹ 20,00,000 (1,00,000 × ₹ 20) is fully called and paid up.
Journal entries in the books of Parimal Company Ltd.
| Particulars | Debit (₹) | Credit (₹) |
|---|
(1) Bank A/c ............ Dr.
To Preference Share Application A/c
(Being application money received on 1,00,000 shares @ ₹ 8) | 8,00,000 |
8,00,000 |
(2) Preference Share Application A/c ............ Dr.
To Preference Share Capital A/c
(Being application money transferred to share capital) | 8,00,000 |
8,00,000 |
(3) Preference Share Allotment A/c ............ Dr.
To Preference Share Capital A/c
(Being allotment money due on 1,00,000 shares @ ₹ 6) | 6,00,000 |
6,00,000 |
(4) Bank A/c ............ Dr.
To Preference Share Allotment A/c
(Being allotment money received) | 6,00,000 |
6,00,000 |
(5) Preference Share First Call A/c ............ Dr.
To Preference Share Capital A/c
(Being first call money due @ ₹ 4) | 4,00,000 |
4,00,000 |
(6) Bank A/c ............ Dr.
To Preference Share First Call A/c
(Being first call money received) | 4,00,000 |
4,00,000 |
(7) Preference Share Final Call A/c ............ Dr.
To Preference Share Capital A/c
(Being final call money due @ ₹ 2) | 2,00,000 |
2,00,000 |
(8) Bank A/c ............ Dr.
To Preference Share Final Call A/c
(Being final call money received) | 2,00,000 |
2,00,000 |
Check: ₹ 8 + ₹ 6 + ₹ 4 + ₹ 2 = ₹ 20 per share; total bank receipts = ₹ 20,00,000 = Preference Share Capital.
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