The document outlines specimen journal entries for recording underwriting transactions in the books of the company being underwritten and the underwriter. For the company, entries are shown for cash received from public share subscriptions, shares received from the underwriter, underwriting commission payable, and cash receivable from the underwriter. For the underwriter, entries record the obligation to take shares, commission receivable, cash paid to settle with the company, and any loss from a decline in the market value of shares underwritten.

1. Specimen Entries
I In the books of Company
(i) When shares are subscribed by the public
Cash A/c xxx
To Equity Share Capital A/c xxx
(ii) For Underwriters Liability
Underwriters A/c xxx
To Share Capital A/c xxx
(Being shares taken by underwriter)
(iii) For underwriting commission payable
Underwriting Commission A/c xxx
To Underwriters A/c xxx
(iv) For net amount receivable from Underwriters
Cash A/c xxx
To Underwriters A/c xxx
II In the books of Underwriters
(i)
For shares to be taken as underwrting
obligation
Shares in Company A/c xxx
To Company A/c xxx
(ii) For Commission receivable
Company A/c xxx
To Underwrting Commission A/c xxx
(iii) For payment of cash in settlement
Company A/c xxx
To Cash A/c xxx
(iv)
If there is any decline in market value of
shares and debenture
P&L A/c xxx
To Shares / Debentures in a Company a/c
xxx