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Accounting entries on Share Issues in a Private Company?

How to start a British limited company. Incorporation or formation of a company in the UK.



A Simple Subscription of Shares

XYZ Ltd have 1000 shares, and issue 1 one pound share, for a cost of 9000 pounds.

Share Capital
Share Premium Account

The share capital increases by 1 share.

A Complicated Situation

Issue of 2 shares, for a value of 20.000 pounds: however, no money was put into the company; the new subscriber received the share in the equity, in exchange for the cancellation of a debt in another company which the initial shareholders owned.

Initial Shareholders' Loan Account
Share Capital