ACCOUNTS

[77°

if the discount cannot be written off, a sinking fund should
be created, built up by annual contributions from revenue
of such an amount as shall, by the date of redemption,
represent the total amount of discount at which the deben-
tures were originally issued. Commission on issues of shares
should be written off at the earliest possible date, as also
should shares issued at a discount pursuant to s. 47.

[n the case of a premium, if the conditions of the issue
provide for the repayment at par of the loan capital in respect
of which it was collected, this can be retained on the balance
sheet, and in the case of both share and debenture capital,
there is no legal obstacle to the amount of cash collected by
way of premium being treated as divisible profit, if the articles
of the company permit. In practice, however, a cash distri-
bution might involve claims for income-tax and such premiums
are more often used for the purpose of a capitalisation of profits
and a distribution of bonus shares.

Cash resulting from issues of capital should be transferred
from time to time from the share capital cash accounts to
the current banking account.

Should there be any amounts outstanding on account of
any call, after the due date fixed for its payment, notice
will have to be sent to the shareholders in arrear, and such
steps taken as may be necessary to enforce payment, in
order that the call account may be fully cleared by the cash
received.

The upper parts of the call letters are returned to the
company by its bankers, who will have given any necessary
receipt to the shareholder. They are then checked against
the call cash book, and the amounts paid up on the shares
posted to the credit of the individual shareholders in the
share register.

The transfer and other registration fees should be collected mpanster
from the registration department at stated intervals by Fees.
the accountant, who should satisfy himself that all fees for
transfers lodged for registration, probates, letters of adminis-
tration and other transfers of title have been collected.

{t is usual for the board to issue a cheque in favour of the Dividend and
bankers for the exact amount of any dividend or debenture Interest
interest, with instructions for it to be placed to the credit Payments.
of the specific dividend or interest account, and this cheque
will be treated through the cash book in the same way as an
ordinary payment and charged to dividend or interest, which
will in due course be cleared by crediting the warrants, as
paid, by a journal entry agreeing with the special pass book.

In some companies it is the practice to journalise the Journal
whole of the entries in the cash book. The only object Entries.