Journal Entries on Calls in Arrear
1. Without Opening Calls in Arrear Account
Under the first method, the company does not need to open a Calls in Arrear account, and can just credit the actual amount received from shareholders to the call account. The call account, in this case, shows the debit balance equal to the unpaid amount of the call. And when the unpaid amount is received, the Bank A/c is debited, and the relevant Call A/c is credited on that date.
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:
i. Final call money received without Calls in Arrear:
ii. Final call money received with Calls in Arrear:
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