How to set Share capital in journal ?

Setting share capital on the credit side of the balance sheet indicates how funds have been raised through the issuance of shares by a company. When shares are issued, the company receives capital from shareholders, which increases the company's equity. This increase in equity is recorded on the credit side of the balance sheet to reflect the source of funds (shareholders' contributions) that have been added to the company's resources.

In accounting principles, the credit side is used to record increases in liabilities, income, and equity. Share capital is a form of equity and therefore increases the company's total equity when shares are issued. This increase is shown on the credit side to maintain the balance between assets (on the debit side) and liabilities and equity (on the credit side) in the accounting equation:

Assets

=

Liabilities

+

Equity

Assets=Liabilities+Equity

Thus, setting share capital on the credit side helps to accurately reflect how the company's resources are funded and contributes to maintaining the accounting equation's balance.

• Access the Journal Entry Interface:

  • Log in to to your biztory software, select in the accouting > journal.
  • Navigate to the option for creating a new journal entry. This is typically found under a section labeled "Journal Entries"

Enter Journal No

• may fill the Journal No -refrence number in the field
• Description - describe what this action does.
• Date - date of this action happening
• Select Accounts:
  • In the journal entry form, you'll see fields for selecting accounts to debit and credit.
  • Choose the bank account you want to debit. This account represents the cash received from the issuance of share capital.
  • Chart of account - under which account should this action be recorded

Enter Credit Amount:

• Enter the same amount you debited to the bank account as a credit to the share capital account.
• Debit & credit - fill in amount in relevant field to indicate inflow or outflow

Save the Journal Entry:

• After reviewing the details to ensure accuracy, save the journal entry.
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