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Course: Grade XII Accountancy
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Grade XII Accountancy

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Ch-7 Issue of Shares

School Revise · Class 12 Accountancy · Chapter 7

Issue of Shares

A company issues shares to raise capital. Money is received in stages: application, allotment and calls. Here you record the entries.

Stages of share money

Money comes in as application, then allotment, then calls. Bank is debited when money is received; Share Capital is credited when the amount becomes due.

Premium

When shares are issued above face value, the extra is credited to the Securities Premium Reserve.

Practise it yourself

A transaction appears below. Type the account to debit, the account to credit and the amounts, then press Check. Use Show solution if stuck, Next for another, New set to reshuffle. Endless practice.

Worked examples

Received application on 20,000 shares @ Rs 3.

Bank A/c Dr 60,000; To Share Application A/c 60,000.

Allotment of Rs 4 due on 20,000 shares.

Share Allotment A/c Dr 80,000; To Share Capital A/c 80,000.

Premium Rs 2 on 20,000 shares received.

Bank A/c Dr 40,000; To Securities Premium Reserve A/c 40,000.

Quick summary

A company receives share money as application, allotment and calls. Bank is debited when money is received; Share Capital is credited when the amount is due; any premium is credited to the Securities Premium Reserve.

© 2026 School Revise. Original content aligned to the CBSE and NCERT Class 12 Accountancy syllabus. Unauthorised copying is not permitted.

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