Share Capital Double Entry

[davidmjones1]

Hi,

We have set up a small new company. We are now entering the transactions into an online accounting package.

What entry should I make for the share capital. I think its only £100.

Would it be debit bank, credit share capital?

Thanks a lot

David

 

[David Griffiths]

That would be correct if you actually paid the money into the bank.

You really shouldn't need to think in debits and credits with a software package

 

[SBlundell]

What entry should I make for the share capital. I think its only £100.

Would it be debit bank, credit share capital?

Yes - if you paid £100 (or whatever the capital amount is) into the bank account for your shares.

(Assuming you're also a director) - Often it will be debit directors' loan £100 credit share capital £100 as the cost of the shares is offset against all of the other expenses the director has paid for on behalf of the company / any other capital introduced to start the business off.

 

[teddys]

Credit : Share Capital
Debit: The subscribers to the memorandum - if these are directors then the directors account.

When the money is received Dr Bank and credit their account

 

[davidmjones1]

Actually it is a bit more complicated.

The company has 100 £1 shares. They are allocated as follows
Director 1 - 50 shares
Non director number 1 - 49 shares
Non director number 2 - only 1 share

The director shares I can debit directors loan account and credit share capital.
How do I account for the other shares which belong to non directors if the company has not received any money from them? Also the non director with 1 share is outside the UK. It would seem crazy to ask him to send £1 from abroad.

Thanks a lot for any help

 

[teddys]

Actually it is a bit more complicated.

The company has 100 £1 shares. They are allocated as follows
Director 1 - 50 shares
Non director number 1 - 49 shares
Non director number 2 - only 1 share

The director shares I can debit directors loan account and credit share capital.
How do I account for the other shares which belong to non directors if the company has not received any money from them? Also the non director with 1 share is outside the UK. It would seem crazy to ask him to send £1 from abroad.

Thanks a lot for any help

To make life easier you could deposit £100 cash in to the bank and then collect it from the three persons.