Question

AXN Ltd. invited applications for issuing 1,00,000 equity shares of Rs 10 each at a premium of Rs 6 per share. The amount was payable as follows:

On Application Rs 4 per share (including Rs 2 premium).
On Allotment Rs 5 per share Including Rs 2 premium).
On First Call Rs 4 per share (including Rs 2 premium).
On Second and Final Call – Balance Amount.

The issue was fully subscribed.

Kumar the holder of 400 shares did not pay the allotment money and Ravi the holder of 1,000 shares paid his entire share money along with allotment money.
Kumar's shares were forfeited immediately after allotment. Afterwards first call was made. Gupta a holder of 300 shares failed to pay the first call money and Gopal a holder of 600 shares paid the second call money also along with first call. Gupta's shares were forfeited immediately after the first call. Second and final call was made afterwards. The whole amount due on second call was received.

All the forfeited shares were re-issued at Rs 9 per share fully paid up.
Pass necessary Journal Entries for the above transactions in the books of the company.
  

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bank A/c (1,00,000 × 4)	Dr.		4,00,000
	To Equity Share Application A/c				4,00,000
	(Received application money on 1,00,000 shares)
	Equity Share Application A/c	Dr.		4,00,000
	To Equity Share Capital A/c				2,00,000
	To Securities Premium Reserve A/c				2,00,000
	(Transfer of application money to Share Capital)
	Equity Share Allotment A/c (1,00,000 × 5)	Dr.		5,00,000
	To Equity Share Capital A/c				3,00,000
	To Securities Premium Reserve A/c				2,00,000
	(Allotment due on 1,00,000 shares )
	Bank A/c (99,600 × 5) + (1,000 × 7)	Dr.		5,05,000
	To Equity Share Allotment A/c (99,600 × 5)				4,98,000
	To Calls-in-Advance A/c (1,000 × 7)				7,000
	(Allotment money received)
	Equity Share Capital A/c (400 × 5)	Dr.		2,000
	Securities Premium Reserve A/c (400 × 2)	Dr.		800
	To Equity Share Allotment A/c (400 × 5)				2,000
	To Equity Share Forfeiture A/c (400 × 2)				800
	(Forfeiture of 400 shares for non-payment of allotment money including premium of Rs 2)
	Equity Share First Call A/c (99,600 × 4)	Dr.		3,98,400
	To Equity Share Capital A/c				1,99,200
	To Securities Premium Reserve A/c				1,99,200
	(Call money due on 99,600 shares)
	Bank A/c (99,300 × 4) − 4,000 + 1,800	Dr.		3,95,000
	Calls-in-Advance A/c (1,000 × 4)	Dr.		4,000
	To Calls-in-Advance A/c (600 × 3)				1,800
	To Equity Share First Call A/c				3,97,200
	(Received call money)
	Equity Share Capital A/c (300 × 7)	Dr.		2,100
	Securities Premium Reserve A/c (300 × 2)			600
	To Equity Share First Call A/c (300 × 4)				1,200
	To Equity Share Forfeiture A/c (300 × 5)				1,500
	(Forfeiture of 300 shares for non-payment of call money)
	Equity Share Second and Final Call A/c (99,300 × 3)	Dr.		2,97,900
	To Equity Share Capital A/c				2,97,900
	(Call money due on 99,300 shares)
	Bank A/c	Dr.		2,93,100
	Calls-in-Advance A/c (3,000 + 1,800)			4,800
	To Equity Share Second and Final Call A/c				2,97,900
	(Received call money on shares)
	Bank A/c (700 × 9)	Dr.		6,300
	Equity Share Forfeiture A/c			700
	To Equity Share Capital A/c				7,000
	(Reissue of 700 shares at Rs 9 per share)
	Equity Share Forfeiture A/c (800 + 1,500 − 700)	Dr.		1,600
	To Capital Reserve A/c				1,600
	(Profit on re-issue transferred to Capital Reserve Account)