Question

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

B Ltd. forfeited 4,000 shares of ₹10 each fully called-up for non-payment of final call of ₹3 per share. 3,000 of these shares were re-issued as fully paid at the maximum rate of discount allowed by law.

Answer 1

Journal entries In the books of B Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Share Capital A/c     ...Dr.		40,000
	To Calls in Arrears A/c (4,000 × ₹3)			12,000
	To Share Forfeiture A/c (4,000 × ₹7)			28,000
	(Forfeiture of 4,000 shares for non-payment of final call ₹3 per share)
2.	Bank A/c (3,000 × ₹7)     ...Dr.		21,000
	Share Forfeiture A/c (3,000 × ₹3)     ...Dr.		9,000
	To Share Capital A/c (3,000 × ₹10)			30,000
	(Re-issue of 3,000 shares @ ₹7 per share as fully paid)