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The journal entry to record the amount receivable when a call is made by the company is: DR CallCR Share capital DR AllotmentCR Share capital DR Share capitalCR Call DR Cash trustCR Call

Question

The journal entry to record the amount receivable when a call is made by the company is: DR CallCR Share capital DR AllotmentCR Share capital DR Share capitalCR Call DR Cash trustCR Call

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Solution

The correct journal entry to record the amount receivable when a call is made by the company is:

DR Call CR Share capital

Here's the step by step explanation:

  1. When a company makes a call, it is asking its shareholders to pay the unpaid amount on their shares. This unpaid amount is a receivable for the company, so it debits (increases) its Call account.

  2. The credit (increase) to the Share Capital account represents the increase in the company's equity as the shareholders pay the amount due on their shares.

So, the journal entry is:

DR (Debit) Call CR (Credit) Share Capital

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