Question

Joy Ltd. invited applications for issuing 20,000 equity shares of Rs 10 each at par. The amount was payable as follows:

On Application − Rs 3 per share

On Allotment − Rs 4 per share

On First and find call − Balance amount

The issue was oversubscribed by three times. Applications for 20% shares were rejected and the money was refunded. Allotment was made to the remaining applicants as follows: 

Category	No. of Shares Applied	No. of Shares Allotted
I	30,000	15,000
II	18,000	5,000

Excess money received with applications was adjusted towards sums due on allotment. Money in excess to sums due on allotment was adjusted towards sums due on first and final call and any money in excess to sums due on first and final call was refunded. Kavi, a shareholder who had applied for 600 shares, failed to pay the remaining allotment money and his shares were immediately forfeited. Kavi belonged to Category I.

Afterwards the first and final call was made. Gupta, who had applied for 400 shares, failed to pay the first and final call. Gupta also belonged to Category I.

Shares of Gupta were also forfeited after the first and final call. The forfeited shares were reissued at Rs 12 per share fully paid up.

Pass necessary journal entries for the above transactions in the books of Joy Ltd.

Answer 1

Journal
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
	Bank A/c    ...Dr. (60,000 × 3)		1,80,000	-
	To Share Application A/c		-	1,80,000
	(Being Received application money on 1,50,000 shares)
	Equity Share Application A/c    ...Dr.		1,80,000	-
	To Equity Share Capital A/c		-	60,000
	To Equity Shares Allotment A/c		-	65,000
	To Share First and Final Call A/c		-	15,000
	To Bank A/c		-	40,000
	(Being Transfer of application money to Share Capital)
	Equity Share Allotment A/c    ...Dr.  (20,000 × 4)		80,000	-
	To Equity Share Capital A/c		-	80,000
	(Being Allotment due on 20,000 shares)
	Bank A/c    ...Dr.		14,700	-
	To Equity Shares Allotment A/c		-	14,700
	(Being Allotment money received)
	Equity Share Capital A/c    ...Dr (300 × 7)		2,100	-
	To Equity Share Allotment A/c		-	300
	To Forfeiture Shares A/c		-	1,800
	(Being 300 shares forfeited for non-payment of allotment money)
	Equity Share First and Final Call A/c    ...Dr.		59,100	-
	To Equity Share Capital A/c		-	59,100
	(Being Call money due on 19,700 shares)
	Bank A/c    ...Dr.		43,500	-
	Calls-in-Advance A/c    ...Dr.		15,000	-
	To Equity Share First and Final Call A/c		-	58,500
	(Being Call money received)
	Equity Share Capital A/c    ...Dr.		2,000	-
	To Equity Share First and Final Call A/c		-	600
	To Share Forfeiture A/c		-	1,400
	(Being 200 shares forfeited for non-payment of call money)
	Bank A/c (500 × 12)    ...Dr.		6,000	-
	To Equity Share Capital A/c		-	5,000
	To Security Premium Reserve A/c		-	1,000
	(Being Reissue of 500 shares at Rs 12 per share)
	Share Forfeiture A/c    ...Dr.		3,200	-
	To Capital Reserve A/c		-	3,200
	(Being Profit on re-issue transferred to Capital Reserve Account)