while making payment to vendor through shares if shares comes in decimal then how we will balance the journal entry - Accountancy - Accounting for Share Capital

Question

while making payment to vendor through shares if shares comes in
decimal then how we will balance the journal entry or what the
entry should be passed

Mohammed Vaseem · Accepted Answer

Number of
shares issued cannot be in fraction In case, the total number of
shares appears in fraction (as is the case mentioned below), then
the fractional part of the shares is to be paid in cash For
example, a company purchased asset worth Rs 1,10,000 from a vendor
and purchase consideration was settled by issuing shares of Rs 10
each at Rs 2 premium

In this case,
the number of share amounts to be 9166 66 <img alt="" width=
"95" height="45" src=
"Number%20of%20shares%20issued%20cannot%20be%20in%20fraction_files/image001%20gif">,
therefore, 9166 number of shares will be issued to the vendor and
the remaining balance of 0 66 will be paid either in cash or
through bank The following Journal entry will record the effect of
the above transaction

Journal

Date

Particulars

L F

Debit

Amount

Rs

Credit

Amount

Rs

Vendor A/c

To Share Capital A/c

To Securities Premium A/c

To Bank A/c
(Amount paid to
vendor by issuing shares a)

1,10,000

91,660

11,332

8

Here, fraction
amount Rs 8 was paid through Bank

while making payment to vendor through shares if shares comes in decimal then how we will balance the journal entry or what the entry should be passed