When accounting for share issues, the ultimate debit and credit entries are which of the following?

Question

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When share issues are accounted for, the company receives cash from shareholders, which is recorded as a debit to the Bank account. The corresponding credit entry is made to the Share capital account, as these funds are being used to increase the company's capital base. Choice A is incorrect because the Application account tracks the amount of money received from applicants for shares before the allotment is made. Choice C is incorrect because the Allotment account tracks the amount of money received from shareholders after the allotment and before the issue of share certificates. Choice D reverses the debit and credit entries, which is incorrect when accounting for the issuance of shares.

When Accounting for Share Issues, the Ultimate Debit and Credit