A company raises its capital by issue shares  . a public company can issue share only after it met prescribed legal compliance .
Public Issue of Shares
Public issue of shares means offer made by a company to public for subscription of shares.
It can be made by a Public Company after complying with the prescribed legal compliances.
Private Placement of Shares
Private Placement of Shares means issue of shares relatively small numbers of select group of investors privately to raise capital and not to public  in general through public issue  . These investors usually are banks, mutual funds and insurance companies .
Q. What i s meant by private placement of shares? All India 2019; Compartment 2018 (APYQs )
Ans. Private placement of shares means selling of shares to a relatively small number of selected investors. Private placement is the opposite of a public issue, in which securities are made available for sale in the open market.
Initial Public Offer: (IPO)*
Making an offer or inviting the public in general for the first time to subscribe shares, is known as Initial Public Offer (IPO).
Issue of Shares for cash means shares issued by a company against amount received by cheque or a banking instrument. These shares may be issued -:
· at par (at nominal or face value) or
· at premium (above the nominal or face value).
· Issue of shares at a discount is not allowed by the Companies Act, 2013 (Section 53).*
Issue price may be payable by the subscriber either:
(i) in lump sum along with the application; or
(ii) in instalments at different stages, i.e., partly on application, partly on allotment and  balance in one or more calls.
accounting of issue of shares for cash in detail.
(i) Issue of Shares and Amount Payable in Lump Sum
When the issue price of shares is payable along with the application, the shares are said to have  been issued against payment in lump sum
Accounting Entries

  • For Receiving Shares Application and Allotment Money:

             Bank A/c                                                                                                 Dr.

                      To Shares Application and Allotment A/c

                                      (Being Application and allotment money received)

  • For Allotment of Shares:

              Shares Application and Allotment A/c                                         Dr.

                         To Share Capital A/c                                                    [With Nominal (face) Value]

                           To Securities Premium Reserve A/c                       [With Premium Amount, if issued at Premium]

(Shares allotted against shares application and allotment money received)
(ii) Issue of Shares and Amount Payable in Instalments
 Issue price of the shares may be payable in instalments.
· First instalment on shares is paid along with the application and is called Application Money. Application money is transferred to Share Capital Account at the time of allotment of shares.
· Second instalment is called by the company on allotment and is called Allotment Money.
· After allotment of shares remaining part of issue price, when called-up is called Call Money .
( Call money may be called by the company to be paid by the shareholders in one or more instalments. If only one call is made then it is called First and Final Call in place of first call,  otherwise the word final is added to the last instalment . )

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