Example of Calls in Advance
Kanika Ltd. has an authorised capital of ₹10,00,000. The company invited applications for 8,000 shares @ ₹10 each payable as: ₹3 on Application, ₹3 on Allotment, ₹2 on First Call, and ₹2 on the Second & Final Call. The shares were fully subscribed and the amount was received. Vishal, the holder of 500 shares paid the whole amount of the first and second call with allotment. Madhur, the holder of 200 shares paid the amount of the second call with the first call. Pass necessary Journal Entries in the books of Kanika Ltd.
Solution:
Calls in Advance: Accounting Entries with Examples on Issue of Shares
Calls in Advance is the amount of future calls which is received by the company in advance. Calls in Advance is just opposite to Calls in Arrear. It is a situation when the shareholders of a company pay the amount not yet called upon their shares. Section 50 of the Companies Act, 2013 says that the company can accept the amount of Calls in Advance only when it is authorised by its Articles of Association.
Table of Content
- Journal Entries on Calls in Advance
- Example of Calls in Advance
- Interest on Calls in Advance
- Journal Entries on Interest on Calls in Advance
- Example of Interest on Calls in Advance