Call money is the amount demanded by a company from shareholders after allotment of shares. It may be first call or final call. Shareholders are required to pay call money within the given time. Call money increases paid up share capital and is recorded when it becomes due and when it is received.
Journal Entries
| Particulars | Debit ₹ | Credit ₹ |
|---|---|---|
| Share Call A/c Dr | Call amount | |
| To Share Capital A/c | Call amount | |
| Bank A/c Dr | Amount received | |
| To Share Call A/c | Amount received |
2. Share Premium
Share premium is the excess amount received over the face value of shares. It is a capital profit and shown under equity. Share premium cannot be distributed as dividend. In India, its use is strictly regulated by the Companies Act 2013.
Journal Entry
| Particulars | Debit ₹ | Credit ₹ |
|---|---|---|
| Bank A/c Dr | Total amount | |
| To Share Capital A c | Face value | |
| To Securities Premium A/c | Premium amount |
3. Share Discount
Shares issued at discount means shares are issued at a price lower than face value. Issue of shares at discount is generally not allowed except in special cases as per Companies Act 2013. Discount is treated as capital loss.
Journal Entry
| Particulars | Debit ₹ | Credit ₹ |
|---|---|---|
| Bank A/c Dr | Amount received | |
| Discount on Issue of Shares A c Dr | Discount | |
| To Share Capital A/c | Face value |
4. Forfeiture of Shares
Forfeiture of shares occurs when a shareholder fails to pay allotment or call money. The company cancels such shares and the amount already received is retained. Forfeiture results in reduction of share capital.
Journal Entry
| Particulars | Debit ₹ | Credit ₹ |
|---|---|---|
| Share Capital A/c Dr | Called up amount | |
| To Share Forfeiture A/c | Amount received | |
| To Share Call or Allotment A/c | Unpaid amount |
5. Surrender of Shares
Surrender of shares is a voluntary return of shares by shareholders to the company. It is treated like forfeiture and usually happens to avoid legal action. Accounting treatment is same as forfeiture.
Journal Entry
| Particulars | Debit ₹ | Credit ₹ |
|---|---|---|
| Share Capital A/c Dr | Called up value | |
| To Share Forfeiture A /c | Amount received |
6. Redemption of Shares
Redemption of shares means repayment of share capital to shareholders. It generally applies to preference shares. Redemption reduces share capital and is done as per Companies Act 2013 rules.
Journal Entry
| Particulars | Debit ₹ | Credit ₹ |
|---|---|---|
| Preference Share Capital A/c Dr | Face value | |
| To Bank A c | Amount paid |
7. Calls in Advance
Calls in advance refer to the amount received from shareholders before it is called by the company. It is not part of share capital and shown as a liability until calls are made.
Journal Entries
| Particulars | Debit ₹ | Credit ₹ |
|---|---|---|
| Bank A/c Dr | Amount received | |
| To Calls in Advance A/c | Amount | |
| Calls in Advance A/c Dr | Adjusted amount | |
| To Share Capital A/c | Adjusted amount |
8. Calls in Arrears
Calls in arrears mean unpaid call money by shareholders even after it becomes due. It is deducted from called up share capital in the balance sheet.
Journal Entry
| Particulars | Debit ₹ | Credit ₹ |
|---|---|---|
| Calls in Arrears A/c Dr | Unpaid amount | |
| To Share Call A/c | Unpaid amount |