Question

The Directors of Rockstar Ltd. invited applications for 2,00,000 Shares of ₹ 10 each, issued at 20% premium. Share was payable as ₹ 5 on application, ₹ 4 (including premium) on allotment and balance on call. Public had applied for 3,20,000 shares out of which applications for 20,000 shares were rejected and remaining were alloted on pro-rata basis.

Simba, an applicant of 15,000 shares failed to pay allotment and call money. His shares were forfeited and out of these 6,000 shares were reissued at a discount of ₹ 2 per share. Journalise.

Answer 1

Journal Entries in the Books of Rockstar Ltd.
Date	Particulars	L.F	Debit (₹)	Credit (₹)
i)	Bank A/c    ...Dr.		16,00,000
	To Share Application A/c			16,00,000
	(Being Application money received)
ii)	Share Application A/c    ...Dr.		16,00,000
	To Share Capital A/c			10,00,000
	To Share Allotment A/c			5,00,000
	To Bank A/c			1,00,000
	(Being Application money utilised)
iii)	Share Allotment A/c    ...Dr.		8,00,000
	To Share Capital A/c			4,00,000
	To Securities Premium A/c			4,00,000
	(Being allotment due with premium)
iv)	Bank A/c   ...Dr.		2,85,000
	Calls in Arrears A/c    ...Dr.		15,000
	To Share Allotment A/c			3,00,000
	(Being allotment received except of Simba)
v)	Share First and Final Call A/c    ...Dr.		6,00,000
	To Share Capital A/c			6,00,000
	(Being call money due)
vi)	Bank A/c    ...Dr.		5,70,000
	Calls in Arrears A/c    ...Dr.		30,000
	To Share First and Final Call A/c			6,00,000
vii)	Share Capital A/c     ...Dr.		1,00,000
	Securities Premium A/c    ...Dr.		15,000
	To Share Forfeited A/c			70,000
	To Calls in Arrears A/c			45,000
	(Being Simba’s shares forfeited)
viii)	Bank A/c    ...Dr		48,000
	Share Forfeited A/c     ...Dr.		12,000
	To Share Capital A/c			60,000
	(Being forfeited shares re-issued)
ix)	Share Forfeited A/c    ...Dr.		30,000
	To Capital Reserve A/c			30,000
	(Being gain on re-issue transferred to Capital Reserve)