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    seemanti's Avatar
    seemanti Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Nov 19, 2007, 06:36 PM
    Journal entry for buying shares
    How to account the journal entry for a share that is issued at $1.00 by company XYZ and bought by another company at $6.00?
    manik chand dey's Avatar
    manik chand dey Posts: 63, Reputation: 2
    Junior Member
    		  
    #2

    Nov 20, 2007, 03:30 AM
    I think this is the case of premium issue, that is 1 $ is the face value and rest 5$ is the premium amount.

    hence in the book of XYZ company the journal entry will be as follows
    1-Bank a/c Dr 6
    to share application a/c 6

    2-Share application a/c Dr 6
    to share capital a/c 1
    to share premium a/c 5
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