Question

Goutham Ltd. forfeited 500 equity shares of ₹ 10 each issued at par held by Ragav for nonpayment of the final call of ₹ 2 per share. The shares were forfeited and reissued to Madhan at ₹ 8 per share. Show the journal entries for forfeiture and reissue.

Answer 1

Date	Particulars	L.F.	Debit Rs.	Credit Rs.
(1)	Share Capital A/c (500 × Rs. 10)  Dr.   To share final call A/c (500 × Rs. 2)   To Forfeiture of shares A/c  [Forfeiture of shares made]		5,000	1,000 4,000
(2)	Bank A/c (500 × Rs. 8)  Dr. Forfeited shares A/c (500 × Rs. 2)  Dr.    To Share capital A/c [Reissue of forfeited shares]		4,000 1,000	5,000
(3)	Forfeited shares A/c   Dr.         To Capital Reserve A/c  [Profit on reissue transferred to capital reserve]		3,000	3,000