Question

A company forfeited certain number of shares of face value ₹ 10 each for non-payment of final call money of ₹ 4. These shares were reissued at a discount of ₹ 5 and the amount of ₹ 4500 was transferred to the capital reserve account. Pass the necessary journal entries to show the above transactions and prepare the Share forfeited account.

Answer 1

Journal Entries
Date	Particulars	Debit	Credit
1.	Share capital A/c     ...Dr.	45,000
	To Forfeited shares A/c		27,000
	To share final call A/c		18,000
	(Being 4500 shares forfeited)
2.	Bank A/c     ...Dr.	22,500
	Forfeited shares A/c     ...Dr.	22,500
	To Share Capital A/c		45,000
	(Being 4500 shares reissued)
3.	Forfeited share A/c     ...Dr.	4,500
	To Capital reserve A/c		4,500
	(Being balance of share forfeiture transferred to Capital reserve)

 

Dr.	Share Forfeiture A/c		Cr.
Particulars	Amount	Particulars	Amount
To Share Capital A/c	22,500	By Share Capital	27,000
To Capital Reserve A/c	4,500
	27,000		27,000