Question

VXN Ltd. invited applications for issuing 50,000 equity shares of Rs 10 each at a premium of Rs 8 per share. The amount was payable as follows:

On Application Rs 4 per share (including Rs 2 premium).
On Allotment Rs 6 per share (including Rs 3 premium).
On First Call Rs 5 per share (including Rs 1 premium).
On Second and Final Call – Balance Amount.

The issue was fully subscribed. Gopal, a shareholder holding 200 shares, did not pay the allotment money and Madhav, a holder of 400 shares, paid his entire share money along with the allotment money. Gopal's shares were immediately forfeited after allotment. Afterwards, the first call was made. Krishna, a holder of 100 shares, failed to pay the first call money and Girdhar, a holder of 300 shares, paid the second call money also along with the first call. Krishna's shares were forfeited immediately after the first call. Second and final call was made afterwards and was duly received. All the forfeited shares were reissued at Rs 9 per share fully paid up.
Pass necessary Journal Entries for the above transactions in the books of the company.

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bank A/c (50,000 × 4)	Dr.		2,00,000
	To Equity Share Application A/c				2,00,000
	(Received application money on 50,000 shares)
	Equity Share Application A/c	Dr.		2,00,000
	To Equity Share Capital A/c				1,00,000
	To Securities Premium Reserve A/c				1,00,000
	(Transfer of application money to Share Capital)
	Equity Share Allotment A/c (50,000 × 6)	Dr.		3,00,000
	To Equity Share Capital A/c				1,50,000
	To Securities Premium Reserve A/c				1,50,000
	(Allotment due on 50,000 shares )
	Bank A/c (49,800 × 6) + (400 × 8)	Dr.		3,02,000
	To Equity Share Allotment A/c (49,800 × 5)				2,98,800
	To Calls-in-Advance A/c (400 × 8)				3,200
	(Allotment money received)
	Equity Share Capital A/c (200 × 5)	Dr.		1,000
	Securities Premium Reserve A/c (200 × 3)	Dr.		600
	To Equity Share Allotment A/c (200 × 6)				1,200
	To Equity Share Forfeiture A/c (200 × 2)				400
	(Forfeiture of 200 shares for non-payment of allotment money including premium of Rs 3)
	Equity Share First Call A/c (49,800 × 5)	Dr.		2,49,000
	To Equity Share Capital A/c				1,99,200
	To Securities Premium Reserve A/c				49,800
	(Call money due on 49,800 shares)
	Bank A/c (49,700 × 5) − 2,000 + 900	Dr.		2,47,400
	Calls-in-Advance A/c (400 × 5)	Dr.		2,000
	To Calls-in-Advance A/c (300 × 3)				900
	To Equity Share First Call A/c				2,48,500
	(Received call money)
	Equity Share Capital A/c (100 × 9)	Dr.		900
	Securities Premium Reserve A/c (100 × 1)			100
	To Equity Share First Call A/c (100 × 5)				500
	To Equity Share Forfeiture A/c (100 × 5)				500
	(Forfeiture of 100 shares for non-payment of call money)
	Equity Share Second and Final Call A/c (49,700 × 3)	Dr.		1,49,100
	To Equity Share Capital A/c				49,700
	To Securities Premium A/c				99,400
	(Call money due on 49,700 shares)
	Bank A/c	Dr.		1,47,000
	Calls-in-Advance A/c (1,200 + 900)			2,100
	To Equity Share Second and Final Call A/c				1,49,100
	(Received call money on shares)
	Bank A/c (300 × 9)	Dr.		2,700
	Equity Share Forfeiture A/c			300
	To Equity Share Capital A/c				3,000
	(Reissue of 300 shares at Rs 9 per share)
	Equity Share Forfeiture A/c (400 + 500 − 300)	Dr.		600
	To Capital Reserve A/c				600
	(Profit on re-issue transferred to Capital Reserve Account)