Comprehension Passage
Faltu Limited invited applications for 2,00,000 shares of Rs. 10 each. These shares were issued at a premium of Rs. 11 each which was allowed at the time of allotment. All money was called and duly received except on 10,000 shares on which only application money of Rs. 3 per share was received.
What accounting treatment is necessary when shares are issued at a premium?
1
The premium amount is credited to the Share Capital account.
2
The premium amount is credited to the Securities Premium account.
3
The premium amount is deducted from the Called-up Share Capital.
4
The premium amount is credited to the General Reserve.