Question

Janta Ltd., invited application for issuing 2,00,000 equity share of Rs 10 each at a discount of 10%. The amount was payable as follows:

On Application Rs 2 per share

On Allotment Rs 3 per share

On First and final call-balance amount

The issue was undersubscribed to the extent of 20,000 shares. Shares were allotted to all the application. All calls were made and were dully received. ‘A’ to whom 1,500 shares were allotted failed to pay allotment and call money and ‘B’ to whom 1,200 share were allotted paid the full amount due at the time of allotment. The share on which allotment and call money was not received were forfeited. The forfeited shares were re-issued at Rs 8 per share fully paid up.

Pass necessary journal entries in the books of Janta Ltd., for the above transaction.

 

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c (1,80,000 shares × Rs 2)	Dr.		3,60,000
	To Share Application A/c				3,60,000
	(Application money received on 1,80,000 shares)
	Share Application A/c	Dr.		3,60,000
	To Share Capital A/c				3,60,000
	(Application money transferred to Share Capital Account)
	Share Allotment A/c (1,80,000 shares × Rs 3)	Dr.		5,40,000
	Discount on Issue of Shares A/c (1,80,000 shares × Rs 3)	Dr.		1,80,000
	To Share Capital A/c (1,80,000 shares × Rs 4)				7,20,000
	(Allotment money due)
	Bank A/c	Dr.		5,40,000
	Calls-in-Arrears A/c (1,500 shares  × Rs 3)	Dr.		4,500
	To Share Allotment A/c				5,40,000
	To Calls-in-Advance A/c (1,200 shares × Rs 4)				4,800
	(Allotment money received except on 1,500 shares and excess on 1,500 shares with calls in advance)
	Share First and Final Call A/c (1,80,000 shares × Rs 4)	Dr.			7,20,000
	To Share Capital A/c
	(First and final call money due at Rs 4 per share)
	Bank A/c	Dr.		7,09,200
	Calls-in-Advance A/c (1,200 shares  × Rs 4)	Dr.		4,800
	Calls-in-Arrears A/c (1,500 shares  × Rs 4)	Dr.		6,000
	To Share First and Final Call A/c				7,20,000
	(First and final call money received)
	Share Capital A/c (1,500 shares  × Rs 10)	Dr.		15,000
	To Share Forfeiture A/c (1,500 shares  × Rs 2)				3,000
	To Share Allotment A/c (1,500 shares  × Rs 3)				4,500
	To Share First and Final Call A/c (1,500 shares  × Rs 4)				6,000
	To Discount on Issue of Shares A/c (1,500 shares  × Re 1)				1,500
	(1,500 shares forfeited for non-payment of allotment and call money)
	Bank A/c (1,500 shares  × Rs 8)	Dr.		12,000
	Discount on Issue of Shares A/c (1,500 shares  × Re 1)	Dr.		1,500
	Share Forfeiture A/c (1,500 shares  × Re 1)	Dr.		1,500
	To Share Capital A/c				15,000
	(1,500 shares re-issued for Rs 8 per shares)
	Share Forfeiture A/c	Dr.		1,500
	To Capital Reserve A/c				1,500
	(Profit on re-issue of shares transferred to Capital Reserve)