Issue of Shares Payable by Installments

Written by True Tamplin, BSc, CEPF®

Reviewed by Subject Matter Experts

Updated on March 09, 2023


In the past, companies typically issued shares payable by installments. These installments were Application, Allotment, First Call, Second Call, and Final Call.

If there is only one call, it is not referred to as the First Call. The words "first," "second," and "final" are only used when there is more than one call.

When shares are issued payable by installments, the amount due for each installment may be debited to the shareholders' account. However, by doing so, no distinction will be made between the various installments.

Therefore a separate account is opened for each installment when it becomes due (e.g., Application, Allotment, First Call, Second Call, and Final Call).

It is worth remembering that these accounts replace the shareholders' accounts. The amount payable on the application of each share will be the full nominal amount of the shares.

Therefore, accounting entries for the issuance of shares, when payable by installments, have not been explained.

Issue of Shares Payable by Installments FAQs

About the Author

True Tamplin, BSc, CEPF®

True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.

True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.

To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.