Question

Reliance company Limited invited applications for 50,000 Equity Shares of ₹ 100 each at par, payable as follows:

On Application	₹ 30
On Allotment	₹ 40
On First & Final Call	₹ 30

The public applied for 35,000 shares and all these were allotted. All money due were collected with an exception of first & final call on 4000 shares, these were forfeited. All forfeited shares were re-issued by the Directors at ₹ 80 per share.

Pass Journal Entries in the Books of Reliance Company Limited.

Answer 1

Journal Entries In the Books of Reliance Co. Ltd.
Date	Particulars	L.F.	Debit Rs.	Credit Rs.
1.	Bank A/c   ...Dr.		10,50,000	-
	To Share Application A/c		-	10,50,000
	(Being Application money on 35000 Equity shares ₹ 30 per share received)
2.	Equity Share Application  ...Dr.		10,50,000	-
	To Equity Share Capital A/c		-	10,50,000
	(Being equity share application money on 35000 shares transferred to Equity share Capital)
3.	Equity Share Allotment A/c      ...Dr.		14,00,000	-
	To Equity Share Capital A/c		-	14,00,000
	(Being equity share allotment money on 35000 shares ₹ 40 per Share due)
4.	Bank A/c   ...Dr.		14,00,000	-
	To Equity Share Allotment A/c		-	14,00,000
	(Being Allotment money on 35000 equity shares ₹ 40 per Share received)
5.	Equity Share First & Final Call A/c   ...Dr.		10,50,000	-
	To Equity Share Capital A/c		-	10,50,000
	(Being equity share allotment money on 35000 shares ₹ 30 per share due )
6.	Bank A/c   ...Dr.		9,30,000	-
	To Equity Share First & Final Call A/c		-	9,30,000
	(Being Equity Share First & Final Call money on 31,000 equity Shares @ ₹ 30 per share received)
7.	Equity Share Capital A/c   ...Dr.		4,00,000	-
	To Equity Share First & Final Call A/c		-	1,20,000
	To Share Forfeiture A/c		-	2,80,000
	(Being forfeiture of 4000 equity shares due to non-payment of first & final call)
8.	Bank A/c    ...Dr.		3,20,000	-
	Share Forfeiture A/c     ...Dr.		80,000	-
	To Equity Share Capital A/c		-	4,00,000
	(Being re-issue for 4000 forfeited shares @ ₹ 80 per share)
9.	Share Forfeiture A/c    ...Dr.		2,00,000	-
	To Capital Reserve A/c		-	2,00,000
	(Being balance on share forfeiture A/c transferred to capital reserve A/c)