Question

Pass entries for forfeiture and reissue in the following case.

Hans Ltd. forfeited 3,000 shares of ₹ 10 each (issued at ₹ 2 premium) for non-payment of first call of ₹ 2 per share. Final call of ₹ 3 per share was not yet made. Out of these, 2,000 shares were reissued at ₹ 10 per share as fully paid.

Answer 1

Journal Entries In the Books of Hans Ltd.
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
1.	Share Capital A/c   ...Dr.		21,000
	To Shares Forfeited A/c			15,000
	To Calls-in-Arrears A/c			6,000
	(3,000 shares forfeited for non-payment of first call money)
2.	Bank A/c   ...Dr.		20,000
	To Share Capital A/c			20,000
	(2,000 shares re-issued @ ₹ 10 per share)
3.	Shares Forfeited A/c   ...Dr.		10,000
	To Capital Reserve A/c			10,000
	(Gain on re-issue of forfeited shares transferred to capital reserve) (Note)

Note: Amount forfeited on 2,000 shares (excluding premium) = 2,000 × ₹ 5 = ₹ 10,000.