Zee Limited was registered with a capital of Rs. 20,00,000, divided into 80,000 shares 
of Rs. Each. The Company offered to the public for subscription 40,000 shares 
payable Rs. 7.50 per share on Application, Rs. 7.50 per share on allotment and the 
balance in two calls of equal amounts. The company received applications for 46,400 
shares. Applications for 4,000 shares were rejected altogether and the application 
money was returned to the applicants . A person who applied for 4,000 shares was 
allotted only 1,600 shares and the excess of his application money was carried 
forward towards the payment of allotment and calls. 
Make Journal entries to record the above issue of shares.

Asked by Cartoon Character | 7th Jul, 2017, 09:57: PM

Expert Answer:

We believe you must be facing difficulty in computation of number of shares to work with for passing the journal entries. In the above case, we know that Zee Ltd. invited applications for 40,000 shares but actually received applications for 46,400 shares. So, we will bifurcate the data in following three categories.
Category (A): Applied 4,000 and Alloted Nil
Category (B): Applied 4,000 and Allotted 1,600
Category (C): Applied 38,400 (46,400 - 8,000) and Allotted 38,400.
Hope this helps you complete the solution. In case of any doubt, feel free to get back to us with the worked out solution. 

Answered by Nikhil Sehgal | 8th Jul, 2017, 05:16: PM