Journal entries for application and allotment of shares

When the application money is received, the bank account is debited, and the share application account is credited.

$$\begin{align*} \text{Bank Account} &\quad \text{Dr.} & \text{Tshs. } 2,000 \\ \text{To Share Application Account} &\quad \text{Cr.} & \text{Tshs. } 2,000 \\ \end{align*}$$

(Being application money received on 1,000 shares at Tshs. 2 per share)

The application money is then transferred from the share application account to the ordinary share capital account.

$$\begin{align*} \text{Share Application Account} &\quad \text{Dr.} & \text{Tshs. } 2,000 \\ \text{To Ordinary Share Capital Account} &\quad \text{Cr.} & \text{Tshs. } 2,000 \\ \end{align*}$$

(Being application money on 1,000 shares transferred to share capital)

When allotment money becomes due, the share allotment account is debited, and the ordinary share capital account is credited.

$$\begin{align*} \text{Share Allotment Account} &\quad \text{Dr.} & \text{Tshs. } 3,000 \\ \text{To Ordinary Share Capital Account} &\quad \text{Cr.} & \text{Tshs. } 3,000 \\ \end{align*}$$

(Being allotment money due on 1,000 shares at Tshs. 3 per share)

Upon receiving the allotment money, the bank account is debited, and the share allotment account is credited.

$$\begin{align*} \text{Bank Account} &\quad \text{Dr.} & \text{Tshs. } 3,000 \\ \text{To Share Allotment Account} &\quad \text{Cr.} & \text{Tshs. } 3,000 \\ \end{align*}$$

(Being allotment money received)

When the first and final call money becomes due, the share first and final call account is debited, and the ordinary share capital account is credited.

$$\begin{align*} \text{Share First and Final Call Account} &\quad \text{Dr.} & \text{Tshs. } 5,000 \\ \text{To Ordinary Share Capital Account} &\quad \text{Cr.} & \text{Tshs. } 5,000 \\ \end{align*}$$

(Being first and final call money due on 1,000 shares at Tshs. 5 per share)

Upon receiving the first and final call money, the bank account is debited, and the share first and final call account is credited.

$$\begin{align*} \text{Bank Account} &\quad \text{Dr.} & \text{Tshs. } 5,000 \\ \text{To Share First and Final Call Account} &\quad \text{Cr.} & \text{Tshs. } 5,000 \\ \end{align*}$$

(Being first and final call money received)

The journal entries are complete.