Arrange the journal entries with regard to first call of shares in the correct sequence:

(A) For Adjustment of Excess Application Money

(B) For Amount Due on Allotment

(C) For Allotment money received.

(D) For Amount Due on call.

Choose the correct answer from the options given below:

The sequence of share capital transactions follows a chronological order based on when each event occurs.

When shares are issued, the typical flow is: Application → Allotment → Calls. Let's understand each entry:

(A) Adjustment of Excess Application Money - This happens at the time of allotment. If shareholders have paid more money with application than required, the excess is adjusted (transferred) towards allotment amount.

(B) Amount Due on Allotment - After adjusting excess application money, the net amount still due on allotment is recorded. This entry debits Share Allotment Account and credits Share Capital Account.

(C) Allotment Money Received - Once allotment is due, shareholders pay the allotment amount. Bank Account is debited and Share Allotment Account is credited.

(D) Amount Due on Call - Only after allotment is complete, the company makes its first call. Share First Call Account is debited and Share Capital Account is credited.

The question specifically asks about entries "with regard to first call," but the sequence includes the preceding allotment entries because excess application money adjustment and allotment entries logically come before any call can be made.

Correct sequence: (A) → (B) → (C) → (D)

Answer: Option 2