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Calls-in-arrears refer to the amount unpaid by the shareholders upon the call made by the company. Such an amount is reduced from ‘called-up capital’ to arrive at the ‘paid-up capital’ of the company. Interest on calls-in-arrears is chargeable as specified in the Articles of Association.


If the Articles of Association are silent regarding the interest on calls-in-arrears, then Table A shall be applicable as per which the rate of interest cannot exceed 5 per cent p.a.

The journal entries for calls-in-arrears are as follows:

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