Answer the next 5 Questions from this passage-

High Light India Ltd. invited applications for 30,000 Shares of ₹100 each at a premium of ₹20 per share payable as follows:

On Application ₹40 (including ₹10 premium)

On Allotment ₹30 (including ₹10 premium)

On First Call ₹30

On Second and Final Call ₹20

Applications were received for 40,000 shares and pro-rata allotment was made on the application for 35,000 share. Excess application money was utilised towards allotment.

Rohan to whom 600 shares were allotted failed to pay the allotment money and his shares were forfeited immediately after allotment.

Aman who applied for 1,050 shares failed to pay first call and his shares were forfeited immediately after first Call.

Second and final call was made. All the money due on second call have been received.

Of the shares forfeited, 1,000 shares were reissued as fully paid-up for ₹ 80 per share, which included the whole of Aman's shares.

Choose journal entries in the books of High Light India Ltd on receiving Application money.

Bank A/c Dr. 16,00,000
       To Share Application A/c 16,00,000

The correct answer is option 1-
Bank A/c Dr. 16,00,000
       To Share Application A/c 16,00,000

Applications received for 40,000 shares for application money 40 per share.
So, amount received = 40,000 x 40
                               = 16,00,000.

Journal entry for receiving application money is-
Bank A/c Dr. 16,00,000
       To Share Application A/c 16,00,000