Company Accounts

Share Capital

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What will be the journal entries when a call is due and the amount of the same is received?

For Call Amount Due

Share Call A/c Dr.

To Share Call A/c

(Call money due on __Shares @ Rs. ___ per share)

For Receipt of Call Amount

Bank A/c Dr.

To Share Capital A/c

(Call money received)

For Call Amount Due

Share Call A/c Dr.

To Share Capital A/c

(Call money due on __Shares @ Rs. ___ per share)

For Receipt of Call Amount

Bank A/c Dr.

To Share Call A/c

(Call money received)

For Call Amount Due

Bank A/c Dr.

To Share Capital A/c

(Call money due on __Shares @ Rs. ___ per share)

For Receipt of Call Amount

Share Call A/c Dr.

To Share Call A/c

(Call money received)

For Call Amount Due

Share Capital A/c Dr.

To Share Call A/c

(Call money received)

For Receipt of Call Amount

Bank A/c Dr.

To Share Call A/c

(Call money due on __Shares @ Rs. ___ per share)

✅ Correct Option: 2

When a company makes a call on shares, two separate events occur - first the amount becomes due (a receivable), and then it is received (cash inflow).

Entry 1: When Call Amount Becomes Due

Share Call A/c represents the amount receivable from shareholders. When the call is made due, the company gains a right to receive this amount.

Journal Entry:

Share Call A/c Dr.

To Share Capital A/c

This entry records that shareholders now owe the call amount to the company. Share Capital increases (credit) as more capital is being called up, while Share Call Account (a receivable) is debited.

Entry 2: When Call Amount is Actually Received

When shareholders pay the call money, the receivable gets converted into cash.

Journal Entry:

Bank A/c Dr.

To Share Call A/c

Bank increases (debit) as cash is received, and Share Call Account decreases (credit) as the receivable is settled.

The key point to understand is that Share Call Account acts as an intermediary account - it is debited when the amount becomes due and credited when the amount is received. This maintains proper accounting records showing both the dues and collections separately.

Option 1 is incorrect as it debits and credits the same account (Share Call) in the first entry. Option 3 incorrectly debits Bank when money is not yet received. Option 4 has the narrations reversed.

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What will be the journal entries when a call is due and the amount of the same is received?

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