Question

Vraj Ltd. issued 40,000 equity shares of ₹ 20 each payable as follows:

On Application: ₹ 4

On Allotment: ₹ 6

On First Call: ₹ 6

On Second Call: ₹ 4

The company received applications for 50,000 equity shares. Allotment of shares was made on pro-rata basis. Share allotment and calls were made and as also received except Ravi holding 100 shares failed to pay both the calls. His shares were forfeited after second call.

Record the above transactions in the books of Vraj Ltd.

Answer 1

Journal Entries in the books of Vraj Limited
Date	Particulars		L. F.	Debit Amount (₹)	Credit Amount (₹)
1.	Bank A/c	Dr.		2,00,000
	To Equity share Application A/c				2,00,000
	(Being application money ₹ 4 per share received on 50,000 equity shares)
2.	Equity Share Application A/c	Dr.		2,00,000
	To Equity Share Capital A/c				1,60,000
	To Equity Share Allotment A/c				40,000
	(Being share application money transferred to share capital A/c and share Allotment A/c)
3	Equity Share Allotment A/c	Dr.		2,40,000
	To Equity Share Capital A/c				2,40,000
	(Being allotment money ₹ 6 per share due on 40,000 equity shares)
4.	Bank A/c	Dr.		2,00,000
	To Equity Share Allotment A/c				2,00,000
	(Being allotment money received from shareholders)
5.	Equity share First call A/c	Dr.		2,40,000
	To Equity Share Capital A/c				2,40,000
	(Being first call money ₹ 6 per share due on 40,000 equity shares)
6.	Bank A/c	Dr.		2,34,000
	To Equity Share First Call A/c				2,34,000
	(Being first call money received on all the equity shares except 1000 shares held by Raja)
7.	Equity Share Second Call A/c	Dr.		1,60,000
	To Equity Share Capital A/c				1,60,000
	(Being second call money ₹ 4 per share due on 40,000 equity shares)
8.	Bank A/c	Dr.		1,56,000
	To Equity share second call A/c				1,56,000
	(Being second call money received on all shares except 1000 shares held by Ravi)
9.	Share Capital A/c	Dr.		20,000
	To Equity Shares First Call A/c				6,000
	To Equity Shares Second Call A/c				4,000
	To Share Forfeiture A/c				10,000
	(Being 1000 equity shares forfeited for non-payment of 1st and 2nd calls)