share payment requirement to issue shares and issuing partly paid shares

" allotte (issue) " - allot and issue are not strictly synonymous As to your confusion, there was quite a stir in the City when the terms of the Telecom issue was announced 50 pence on application, 40 pence one year later and 40 pence another year after that (I got my dates wrong in the previous post) That's £1.30 per share and 25% + 30 pence premium is 55 pence yet only 50 pence was payable on application and the lucky applicants were allotted those shares "Ah" said the Government. But the successful allottees are now bound in contract to pay the remaining amount. So the double entry for, say, 10,000 shares is: Dr Cash 10,000 x 50p 5,000 Dr Receivables 10,000 x 40p 4,000 Dr Receivables 10,000 x 40p 4,000 Cr Share Capital 10,000 x £1 10,000 Cr Share Premium 10,000 x 30p 3,000 There's no point in having the power to make the rules if you're not allowed to bend them every now and again "and you can’t issue at a price below the nominal value?)" You cannot issue shares credited AS FULLY PAID when the amount to be received is less than nominal value OK?

The 25% is strictly "25% of the nominal value" so 25% of the £1 nominal value of each share Don't confuse "paid up" and "called up" Let me sort out these dates for you 50 pence payable on application 40 pence payable on allotment 40 pence payable one year later (I'm not going to change these dates after this post!) When I applied for shares in Telecom, I sent in my application form together with a payment of £100 for my offer to buy 200 shares The shares were allotted to me and I immediately had to pay a further 40 pence per share - a further amount of 200 * 40 pence = £80 So the double entry for my 200 shares in Telecom's records is now: Dr Cash 100 Cr Provisional Share Capital 100 Then: Dr Provisional Share Capital 100 Cr Share Capital 100 Dr Cash 80 Cr Share Capital 20 Cr Share Premium 60 And a year later: Dr Cash 80 Cr Share Capital 80 If I had failed to pay that first lot of £80, I would have forfeited the shares and would have received none of the £100 already paid on application By the time the first entries are getting into the Share Capital Account, the net effect will have been: Dr Cash 180 Cr Share Capital 120 Cr Share Premium 60 So, following the allotment of my 200 shares, Telecom has issued 200 £1 Ordinary Shares (60 pence partly paid) at a premium of 30 pence .... .... and the top two lines in the Capital and Reserves section of the Statement of Financial Position would read: Share Capital, Ordinary Shares of £1 each, authorised, issued and 60p partly paid 120 Share Premium 60 OK?

I credited a Provisional Share Capital Account until I was certain that the allottees had paid the amount due (40 pence) when they had been notified that they had been successful in their application to buy Until that second payment had been received, the shares were only provisionally allotted. But that means that, after receipt of the second amount, we are now certain of the allotment of shares to those successful applicants so now I can take out of the Provisional Share Capital Account (by debiting to remove the earlier credit) and instead credit the Share Capital Account Is that any clearer? The accounting topic of "Issue and Forfeiture of Shares" used to be in the syllabus for ICAEW qualification! But was dropped from the syllabus a good many years ago. In fact, there's a strong possibility that it was dropped before you were born! OK?

Your entire paragraph is correct :-) OK?

No, you're still confused The law states that a company cannot issue shares credited as fully paid for an amount less that the shares' nominal value But the emphasis here is "credited as fully paid" It can issue shares as partly paid - in your post, it would issue the shares credited as 30 cents paid Is that any better for you?

"....then it is against the law to credit that as a fully paid $1 share?" Correct That's totally correct

The figures in a trial balance are monetary amounts You have, in the trial balance extract in your post, "50,000 equity shares of 20 cents each" That's $50,000 worth of equity shares where each share has a nominal value of 20 cents If you held 5 shares in that company, the aggregate nominal value of your holding would be: 5 (shares) * 20 cents (nominal value per share) = $1 So $50,000 worth of equity shares nominal value would represent $50,000 * 5 = 250,000 shares of 20 cents each OK?