Question

Pass journal entries for the forfeiture and re-issue in the following case:

A Ltd. forfeited 1,000 shares of ₹10 each fully called-up for non-payment of first call of ₹3 per share and final call of ₹3 per share. All of these shares were re-issued as fully paid for ₹10 per share.

Answer 1

Journal entries  In the books of A Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Share Capital A/c     ...Dr.		10,000
	To Calls in Arrears A/c			6,000
	To Share Forfeiture A/c			4,000
	(Forfeiture of 1,000 shares for non-payment of ₹3 first call and ₹3 final call)
2.	Bank A/c     ...Dr.		10,000
	To Share Capital A/c			10,000
	(Reissue of 1,000 shares @ ₹10 each fully paid-up)
3.	Share Forfeiture A/c     ...Dr.		4,000
	To Capital Reserve A/c			4,000
	(Transfer of surplus in Share Forfeiture A/c to Capital Reserve A/c)