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 - Accountancy

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.

Journal Entry

Ledger

Solution

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