Issue of shares Procedures of issuing shares by installment Issue prospectus to call upon shares application Receive share application with application money Record the call if the shares are issued by instalments Return application money to unsuccessful applicants Allot shares to successful applicants Issue of shares ► Journal entries for issues of shares by installment Procedures Share applications received On allotment Receive money on allotment stage Refund to those unsuccessful applicants On Call Journal Entries DR Cash CR Application and Allotment - Ordinary Shares DR Application and Allotment - Ordinary Shares CR Share Capital DR Cash CR Application and Allotment - Ordinary Shares DR Application and Allotment - Ordinary Shares CR Cash DR Call Account CR Share Capital Call money received DR Cash CR Call Account

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter10: Stockholder's Equity
Section: Chapter Questions
Problem 61E: Issuing and Repurchasing Stock Mohawk Company had the following transactions related to its common...
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This is about equity (earning per share.) Can you explain what is "recevied the call" and "call account", and the last two jornal entries. 

Issue of shares
Procedures of issuing shares by installment
Issue prospectus to
call upon shares
application
Receive share
application with
application
money
Record the call
if the shares are
issued by
instalments
Return
application
money to
unsuccessful
applicants
Allot shares to
successful
applicants
Transcribed Image Text:Issue of shares Procedures of issuing shares by installment Issue prospectus to call upon shares application Receive share application with application money Record the call if the shares are issued by instalments Return application money to unsuccessful applicants Allot shares to successful applicants
Issue of shares
► Journal entries for issues of shares by installment
Procedures
Share applications received
On allotment
Receive money on allotment
stage
Refund to those unsuccessful
applicants
On Call
Journal Entries
DR Cash
CR Application and Allotment - Ordinary Shares
DR Application and Allotment - Ordinary Shares
CR Share Capital
DR Cash
CR Application and Allotment - Ordinary Shares
DR Application and Allotment - Ordinary Shares
CR Cash
DR Call Account
CR Share Capital
Call money received
DR Cash
CR Call Account
Transcribed Image Text:Issue of shares ► Journal entries for issues of shares by installment Procedures Share applications received On allotment Receive money on allotment stage Refund to those unsuccessful applicants On Call Journal Entries DR Cash CR Application and Allotment - Ordinary Shares DR Application and Allotment - Ordinary Shares CR Share Capital DR Cash CR Application and Allotment - Ordinary Shares DR Application and Allotment - Ordinary Shares CR Cash DR Call Account CR Share Capital Call money received DR Cash CR Call Account
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