Rearrange the following steps in a logical sequence to be followed during issue of Share Capital.

(A) Making allotment due
(B) Making first and final call due
(C) Receiving Share Application money
(D) Receiving Allotment money
(E) Transferring Share Application to Share Capital

Choose the correct answer from the options given below:

(C), (E), (A), (D), (B)

The correct answer is Option 3 - (C), (E), (A), (D), (B).

The correct sequence of steps during the issue of share capital is:

(C) Receiving Share Application money- 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.

(E) Transferring Share Application to Share Capital- After receiving the applications, If all the conditions are met, the company moves the application money to its Share Capital account.

(A) Making allotment due-  Once the application money is received and transferred to the Share Capital account, the company proceeds with the allotment process. The allotment is made based on the number of shares they allotted for, not applied.

(D) Receiving Allotment money- Once the shares are allotted, the company calls for the allotment money, which is the payment that shareholders must make based on the number of shares allotted to them. Shareholders are required to pay this amount in full or in installments as per the company's allotment terms.

(B) Making first and final call due- If the company has structured the payment of share capital in multiple stages (e.g., an initial application money, followed by an allotment money, and then a final call), the final call is made after the allotment money is received. The first and final call is the final request for shareholders to pay the remaining balance due on their shares.

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)