The correct answer is Option 3 - (C), (E), (A), (D), (B).
The correct sequence of accounting events for share capital:
* Receipt of Applications: Prospective investors who wish to purchase shares in the company submit applications along with the application money. The application money is deposited into a scheduled bank as specified in the prospectus. The company must receive the minimum subscription amount within 120 days of issuing the prospectus. If the company does not receive the minimum subscription amount within this time period, it cannot proceed with the allotment of shares and must return the application money to investors within 130 days of issuing the prospectus.
* Allotment of Shares: If the company receives the minimum subscription amount, it may proceed with the allotment of shares after fulfilling certain legal formalities. The company sends letters of allotment to investors who have been allocated shares and letters of regret to investors who have not been allocated shares. Once shares have been allotted, a valid contract is formed between the company and the investors, who are now shareholders of the company.
* Making Calls: Calls are important for making shares fully paid-up and for collecting the full amount of shares from shareholders. After shares are allotted, a company can make calls. If shares are not fully called up by the time allotment is complete, the directors can ask for the remaining amount on shares whenever they decide to do so. It is also possible that the timing of call payments by shareholders is determined at the time of share issue and is given in the prospectus.
The following journal entries are passed in the following sequence-
1) Receive of application money
Bank A/c Dr.
To Share Application A/c
(Amount received on application for — shares @ Rs. ______ per share)
2) For Transfer of Application Money
Share Application A/c Dr.
To Share Capital A/c
(Application money on _____ Shares allotted/transferred to Share Capital)
3) For Amount Due on Allotment
Share Allotment A/c Dr.
To Share Capital A/c
4) For Receipt of Allotment Money
Bank A/c Dr.
To Share Allotment A/c
(Allotment money received on ___Shares @Rs. — per share Combined Account)
5) For Call Amount Due
Share Call A/c Dr.
To Share Capital A/c
(Call money due on ___Shares @ Rs. ____ per share)
6) For Receipt of Call Amount
Bank A/c Dr.
To Share Call A/c
(Call money received) | 
