Question

VXN Ltd invited application for issuing 50,000 equity shares of 10 each as a premium of 8 per share. The amount was payable as follows :

On Application: Rs 4 per share (including Rs 3 premiums)
On Allotment: Rs 6 per share (including Rs 3 premiums)
On First Call: Rs 5 per share (including Rs 1 premium)
On second and final Call: Balance Amount

The issue was fully subscribed Gopal a shareholder holding 200 shares did not pay the allotment money and Madhav, a holder of 400 shares paid his entire share money along with the allotment money. Gopal’s Shares were immediately forfeited after allotment, Afterwards, the first call was made Krishna, a holder of 100 shares, failed to pay the first call money and Giridhar, a holder of 300 shares, paid the second call money also along with the first call. Krishna’s shares were forfeited immediately after the first call. A second and final call was made afterwards and was duly received. All the forfeited shares were reissued at Rs 9 per share fully paid up.

Pass necessary journal entries for the above transaction in the books of the company.

Answer 1

Journal
Date	Particulars	L.F	Debit Rs	Credit Rs
	Bank A/c (50,000 x 4)     Dr    To Equity Share Application A/c (Received application money on 50,000 shares) Equity Share Application A/c    Dr    To Equity Share Capital A/c    To Securities Premium Reserve A/c (Transfer of application money to Share Capital) Equity Share Allotment A/c (50,000 x 6)   Dr   To Equity Share Capital A/c    To Securities Premium Reserve A/c (Allotment due on 50,000 shares ) Bank A/c (49,800 x 6) + (400 x 8)  Dr   To Equity Share Allotment A/c (49,800 x 6)   To Calls-in-Advance A/c (400 x 8) (Allotment money received) Equity Share Capital A/c (200 x 5)  Dr. Securities Premium Reserve A/c (200 x 3)  Dr    To Equity Share Allotment A/c (200 x 6)    To Equity Share Forfeiture A/c (200 x 2) (Forfeiture of 200 shares for non-payment of allotment money including premium of Rs 3) Equity Share First Call A/c (49,800 x 5)  Dr   To Equity Share Capital A/c   To Securities Premium Reserve A/c (Call money due on 49,800 shares) Bank A/c (49,700 x 5) − 2,000 + 900   Dr Calls-in-Advance A/c (400 x 5)-Adjustment of Previous  Dr Receipts      To Calls-in-Advance A/c (300 x 3)      To Equity Share First Call A/c (Received call money) Equity Share Capital A/c (100 x 9)   Dr Securities Premium Reserve A/c (100 x 1)    To Equity Share First Call A/c (100 x 5)    To Equity Share Forfeiture A/c (100 x 5) (Forfeiture of 100 shares for non-payment of call money) Equity Share Second and Final Call A/c (49,700 x 3)  Dr     To Equity Share Capital A/c     To Securities Premium Reserve A/c (Call money due on 49,700 shares) Bank A/c   Dr Calls-in-Advance A/c (1,200 + 900)- Adjustment    To Equity Share Second and Final Call A/c (Received call money on shares) Bank A/c (300 x 9)  Dr Equity Share Forfeiture A/c    To Equity Share Capital A/c (Re-issue of 300 shares at Rs 9 per share) Equity Share Forfeiture A/c (400 + 500 − 300)   Dr   To Capital Reserve A/c (Profit on re-issue transferred to Capital Reserve Account)		2,00,000     2,00,000       3,00,000       3,02,000       1,000 600         2,49,000       2,47,400 2,000         900 100       1,49,100       1,47,000 2,100     2,700 300     600	2,00,000     1,00,000 1,00,000     1,50,000 1,50,000     2,98,800 3,200       1,200 400       1,99,200 49,800         900 2,48,500       500 500     49,700 99,400       1,49,100       3000     600