when shares issued are paid for, accounting entry required is
debit bank or cash account and credit share capital and/or premium account
credit bank or cash account and debit share capital and/or premium account
debit shares account and credit capital account
credit shares account and debit capital account
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Discussions (14)
when a share is issue in any form the potential investor or applicant need to pay to the bank immediately the share is been roll out for this reason bank receive the money u debit the bank a\c as the receiver and credit the corresponding a\c
u are misunderstanding something here.d principle/rules of double entry make us to understand dt any cash recevd shud b debited whil cash goin out is credited nd any capital comin in shd b credited whil d 1 goin out shd b debited nd any liability goin out shd b debited whil d 1 comin in is credited.den in diz case cash is goin out whil shares is comin in d ansa rules suppose 2 b credit cash nd debit shares acct
when shares are fully paid for, it has the nominal value and its premium, the money has been paid for, i.e the share capital A/C should be debited since its the receiving ac (receiving money for share issued/sold)...to complete double entry principle, u therefore credit Bank/cash acc.
for example: u deposit money in a bank, d money still belong to u, d bank gives u credit alert i.e dey credit u n u debit urself in ur personal cash book bcos d money still belong to
pls xpln y u choz B,cos to me A is de rit ans :debit the receiver & credit the giver @ horper
