Question

Joy Ltd. invited applications for issuing 20,000 equity shares of Rs 10 each at par. The amount was payable as follows:
 

On Application − Rs 3 per share
On Allotment − Rs 4 per share
On First and find call − Balance amount

The issue was oversubscribed by three times. Applications for 20% shares were rejected and the money was refunded. Allotment was made to the remaining applicants as ffollows: 

Category	No. of Shares Applied	No. of Shares Allotted
I	30,000	15,000
II	18,000	5,000

Excess money received with applications was adjusted towards sums due on allotment. Money in excess to sums due on allotment was adjusted towards sums due on first and final call and any money in excess to sums due on first and final call was refunded. Kavi, a shareholder who had applied for 600 shares, failed to pay the remaining allotment money and his shares were immediately forfeited. Kavi belonged to Category I.

Afterwards the first and final call was made. Gupta, who had applied for 400 shares, failed to pay the first and final call. Gupta also belonged to Category I.

Shares of Gupta were also forfeited after the first and final call. The forfeited shares were reissued at Rs 12 per share fully paid up.

Pass necessary journal entries for the above transactions in the books of Joy Ltd.

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bank A/c (60,000 × 3)	Dr.		1,80,000
	To Share Application A/c				1,80,000
	(Received application money on 1,50,000 shares)
	Share Application A/c	Dr.		1,80,000
	To Share Capital A/c				60,000
	To Share Allotment A/c				65,000
	To Share First and Final Call A/c				15,000
	To Bank A/c				40,000
	(Transfer of application money to Share Capital)
	Share Allotment A/c (20,000 × 4)			80,000
	To Share Capital A/c				80,000
	(Allotment due on 20,000 shares )
	Bank A/c	Dr.		14,700
	To Share Allotment A/c (WN 2)				14,700
	(Allotment money received)
	Share Capital A/c (300 × 7)	Dr.		2,100
	To Share Allotment A/c				300
	To Share Forfeiture A/c				1,800
	(300 shares forfeited for non-payment of allotment money)
	Share First and Final Call A/c	Dr.		59,100
	To Share Capital A/c				59,100
	(Call money due on 19,700 shares)
	Bank A/c	Dr.		58,500
	To Share First and Final Call A/c				58,500
	(Call money received)
	Share Capital A/c	Dr.		2,000
	To Share First and Final Call A/c				600
	To Share Forfeiture A/c				1,400
	(200 shares forfeited for non-payment of call money)
	Bank A/c (500 × 12)	Dr.		6,000
	To Share Capital A/c				5,000
	To Security Premium Reserve A/c				1,000
	(Reissue of 500 shares at Rs 12 per share)
	Share Forfeiture A/c	Dr.		3,200
	To Capital Reserve A/c				3,200
	(Profit on re-issue transferred to Capital Reserve Account)