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Question
Pass necessary journal entries for forfeiture and reissue of forfeited shares in the following cases:
Deepak Ltd. forfeited 800 shares of ₹ 10 each, ₹ 8 per share called up, for non-payment of first call of ₹ 3 per share. All the forfeited shares were reissued for ₹ 12 per share fully paid.
Solution
| In the Books of Deepak Ltd Journal |
||||
| Date | Particulars | L.F. | Debit (₹) | Credit (₹) |
| Share Capital A/c (800 × ₹ 8) ...Dr. | 6,400 | |||
| To Share First Call A/c (800 × ₹ 3) | 2,400 | |||
| To Share Forfeiture A/c | 4,000 | |||
| (Being 8,00 shares forfeited for non-payment of first call money) | ||||
| Bank A/c (800 × ₹ 12) ...Dr. | 9,600 | |||
| To Share Capital A/c (800 × ₹ 10) | 8,000 | |||
| To Securities Premium Reserve A/c ( 800 × ₹ 2) | 1,600 | |||
| (Being 800 forfeited shares reissued at ₹ 12 per share fully paid) | ||||
| Share Forfeiture A/c ...Dr. | 4,000 | |||
| To Capital Reserve A/c | 4,000 | |||
| (Being profit on reissue of 800 forfeited shares transferred to Capital Reserve Account) | ||||
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