Example of Interest on Calls in Arrear
Tanya Ltd. issued 70,000 shares @ ₹10 each payable as ₹4 on Application (1st January 2021), ₹3 on Allotment (1st March 2021), and ₹3 on First and Final Call (1st May 2021). Kashish was allotted 1,200 shares and he failed to pay the First & Final Call money on the due date. But he paid the unpaid first & final call money on 1st August 2021 with the interest of 10% p.a. Pass necessary Journal Entries in the books of Tanya Ltd.
Solution:
Calculation:
= 90
Calls in Arrear: Accounting Entries with Examples on Issue of Shares
Calls in Arrear refer to the amount of money that a shareholder has not yet paid to a company on shares they have agreed to purchase. In the context of a company issuing shares, the payment for these shares is often requested in installments, known as “calls.” If a shareholder does not pay an installment by the due date, the unpaid amount is termed “calls in arrear”.
Table of Content
- Journal Entries on Calls in Arrear
- Example of Calls in Arrear (Without Opening Calls in Arrear A/c)
- Example of Calls in Arrear (By Opening Calls in Arrear A/c)
- Interest on Calls in Arrear
- Journal Entries on Interest on Calls in Arrear
- Example of Interest on Calls in Arrear