Lesson eLearning

A company issues 3,000 equity shares of ₹10 each at ₹12 each. Prepare the journal entry for the issue.

easy 1 mark Class 12 · Accountancy · Accounting for Share Capital
Answer
Cash ₹36,000, Share Capital ₹30,000, Share Premium ₹6,000

The correct answer is Cash ₹36,000, Share Capital ₹30,000, Share Premium ₹6,000 — Credit Share Premium ₹6,000.

Step-by-step solution

  1. Compute total proceeds: 3,000 × 12 = 36,000.
  2. Compute nominal value: 3,000 × 10 = 30,000.
  3. Compute premium: 36,000 – 30,000 = 6,000.
  4. Debit Cash ₹36,000.
  5. Credit Share Capital ₹30,000.
  6. Credit Share Premium ₹6,000.
Common mistake: Forgetting to debit Cash or mis‑calculating the premium

Concept tested: Journal entry for share issue at premium

Published · How this solution was prepared and checked

← All Accounting for Share Capital questions