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Meera Co. Ltd. invited applications of 50.000. equity shares of Rs 10 each at a premium of Rs 2 per share, payable as follows :

On Application on 1st May. 2017 Rs 2

On Allotment on 1st July. 2017 RS 5 (including premium)

On 1st and Final Call on 1st October. 2017 RS 5

The Company received applications for 62,500 shares. It was decided to :

(a) Refuse allotment to the applicants of 2,500 shares. 

(b) Allot in full to the applicants of 10,000 shares. 

(c) Allot the balance of the shares applied on a pro-rata basis among the other applicants. 

(d) Utilize the excess application money in part payment of allotment money. 

(e) Charge interest on calls-in-arrears, if any, @ 10% per annum.

All the money due w as received except from one shareholder to whom 200 shares had been allotted in full. The amount was due by him to the company even till the date of the Balance Sheet, which was 31st March, 2018.

The company charged interest on calls-in arrears from the shareholders from the date on which it was due till the Balance Sheet date. You are required to, for the year 2017-18.

(i) Prepare the Cash Book to record the above issue of shares. 

(ii) Pass journal entries in the Journal Proper (including entries for interest on calls - in arrears).

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Working Notes . 

Calculation of Interest

No. of shares = 200

Amount due = 200 × 5 = Rs 1,000

Interest = 1000 x 10 x 6/ 100 x 12

= Rs 50

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