Journal entry for consolidation of shares

3544 views 4 replies

Dhruv Gaglani

Learning

278 Points Joined July 2009

Journal Entry for Consolidation of shares and Fractional Entitlements

Dear All, If a Company A consolidates shares say 10 shares of Rs. 20/- each are consolidated into 1 share of Rs. 200/- each, then what is the journal entry in the books of Company A?

Further suppose if a shareholder holds only 2 shares, then he shall be paid off for his shares, what is known as fractional entitlements. Also suppose a shareholder purchases these fractional entitlements and make the payment accordingly to the company, what shall be journal entries passed in the books of Company A?

1. Journal entry for consolidation of shares?;

2. Journal Entry for payment of fractional entitlements to small shareholders by the company?;

3. Journal entry for purchase of fractional entitlement by shareholders to the company?

Thanking you in advance.

Replies (4)

Tribhuvan Aditya Singh

Student as well as Self-employed

3710 Points Joined September 2007

1. share capital a/c debit to share capital a/c... (narration: being .... shares of face value rs. 20 being converted into .... shares of face value rs. 200)

Tribhuvan Aditya Singh

Student as well as Self-employed

3710 Points Joined September 2007

2. for any payment to shareholder for faractional shares will be..... share capital a/c debit to cash/bank a/c.... (narration: being amount paid to shareholder for fractional shares held by them)