1. When the shares are issued by a company at par:-

a) On receipt of application money

Debit:- Bank Account

Credit:- Share Application Account

b) On refund of excess money received against application

Debit:- Share Application Account

Credit:- Bank Account

c) On transfer of share application account to capital account

Debit:- Share Application Account

Credit:- Share Capital Account

The following entries will be made in respect of issue of shares by a company:-

2. When the shares are issued by a company at premium:-

a) On receipt of application money

Debit:- Bank Account

Credit:- Share Application Account

b) On refund of excess money received against application

Debit:- Share Application Account

Credit:- Bank Account

c) On transfer of share application account to capital account

Debit:- Share Application Account

Credit:- Share Capital Account

Credit:- Share Premium Account

3. When the shares are issued by a company at discount:-

a) On receipt of application money

Debit:- Bank Account

Credit:- Share Application Account

b) On refund of excess money received against application

Debit:- Share Application Account

Credit:- Bank Account

c) On transfer of share application account to capital account

Debit:- Share Application Account

Debit:- Discount on Issue of Shares Account

Credit:- Share Capital Account

Credit:- Share Premium Account

4. Issue of Shares to Promoters Other Than Cash

When the shares are issued to the promoters for furnishing technical information, engineering services, plant layout and other specification then the following entry will be made:-

Debit:- Goodwill Account

Credit:- Share Capital Account

5. Issue of Shares to Vendors

Sometimes company issues fully paid shares to the vendors from whom it buys the assets. In this case the following entry will be made:-

a) At the time of purchase of assets:-

Debit:- Assets Account

Credit:- Vendor’s Account

b) At the time of issue of shares:-

Debit:- Vendor’s Account

Credit:- Share Capital Account

6. Issue of Bonus Shares

a) Capitalization of bonus shares

Debit:- Bonus to Shareholders Account

Credit:- Share Capital Account

b) Transfer of bonus account to reserves:-

Debit:- Security Premium or Shares Premium Account

and    or

Debit:- General Reserve Account

Credit:- Bonus to Shareholders Account

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