Interest on Calls in Arrear
A company is authorised to charge Interest on Calls in Arrears from the due date to the date of actual payment at a rate specified in the articles of the company. However, if the articles of the company are silent, then Table F of Schedule I of the Companies Act, 2013 will be applicable for charging interest at a rate not exceeding 10% p.a. Besides, the directors of the company have the right to waive payments of such interests in part or whole.
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