Question

X Ltd. forfeited 800 shares of ₹20 each issued at a premium of ₹2 per share to Mahesh (₹18 called-up) on which he did not pay first call of ₹4. Of these, 300 shares were re-issued @ ₹15 per share as ₹18 paid-up. Journalise.

Answer 1

Journal Entries In the books of X Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Equity Share Capital A/c (800 × 18)     ...Dr.		14,400
	To Calls in Arrears A/c (800 × ₹4)			3,200
	To Share Forfeiture A/c (800 × (18 − 4))			11,200
	(Being forfeiture for non-payment of first call; premium already received, not reversed)
2.	Bank A/c     ...Dr.		4,500
	Share Forfeiture A/c     ...Dr.		1,500
	To Equity Share Capital A/c (300 × ₹20)			6,000
	(Being re-issue of 300 forfeited shares @ ₹15 as fully paid)
3.	Share Forfeiture A/c     ...Dr.		2,700
	To Capital Reserve A/c			2,700
	(Being surplus on re-issue transferred: 4,200 − 1,500)

Working Note:

Re-issue: 300 shares @ ₹15 “as fully paid”
Discount on re-issue = (₹20 − ₹15) × 300 = ₹1,500
Proportionate forfeiture on these 300 shares = 300/800 × 11,200 = ₹4,200.
Transfer to Capital Reserve = 4,200 − 1,500 = ₹2,700.