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Question
Nivetha Ltd. forfeited 1,000 equity shares of ₹ 10 each for non-payament of call of ₹ 4 per share. Of these 800 shares were reissued @ ₹ 7 per share. Pass journal entries for forfeiture and reissue?
Solution
| Date | Particulars | L.F. | Debit Rs. | Credit Rs. |
| (1) | Share Capital A/c (10,000 × Rs. 10) Dr. To share I call A/c (1,000 × Rs. 4) To Forfeiture of shares A/c (1,000 × Rs. 6) [Forfeiture of shares made] |
10,000 | 4,000 6,000 |
|
| (2) | Bank A/c (800 × Rs. 7) Dr. Forfeited shares A/c (800 × Rs. 3) Dr. To Share capital A/c [Reissue of forfeited shares] |
5,600 2,400 |
8,000 | |
| (3) | Forfeited shares A/c (800 × Rs. 3) Dr. To Capital Reserve A/c [Profit on reissue transferred to capital reserve] |
2,400 | 2,400 |
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