Example of Calls in Arrear (Without Opening Calls in Arrear A/c)
Nisha Ltd. issues 10,000 shares of ₹10 each payable as: ₹2 on application, ₹4 on allotment, ₹3 on the First Call, and ₹1 on the Second & Final Call. The shares were fully subscribed and all money was duly received except First Call money on 1,000 shares and Second & Final Call money on 2,000 shares. Pass necessary Journal Entries without opening Calls in Arrear Account.
Solution:
2. By Opening Calls in Arrear Account
Under this method, the company opens Calls in Arrear A/c and debits the same when some amount of allotment or calls is not received. And once the company receives the amount in arrear, the Bank A/c is debited, and the Calls in Arrear A/c is credited.
A. On making the First Call due:
B. On receipt of the First Call:
C. On making the Final Call due:
D. On receipt of the Final Call:
Calls in Arrear: Accounting Entries with Examples on Issue of Shares
Calls in Arrear refer to the amount of money that a shareholder has not yet paid to a company on shares they have agreed to purchase. In the context of a company issuing shares, the payment for these shares is often requested in installments, known as “calls.” If a shareholder does not pay an installment by the due date, the unpaid amount is termed “calls in arrear”.
Table of Content
- Journal Entries on Calls in Arrear
- Example of Calls in Arrear (Without Opening Calls in Arrear A/c)
- Example of Calls in Arrear (By Opening Calls in Arrear A/c)
- Interest on Calls in Arrear
- Journal Entries on Interest on Calls in Arrear
- Example of Interest on Calls in Arrear