Question

Pass entries for forfeiture and reissue in the following case.

Hina Ltd. forfeited 5,000 shares of Rahul, who had applied for 6,000 shares for non-payment of allotment money of ₹ 5 per share and first and final call of ₹ 2 per share. Out of these, 3,000 shares were reissued @ ₹ 12 per share as fully paid.

Answer 1

Journal Entries In the Books of Hina Ltd.
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
(i)	Share Capital A/c Dr.		50,000
	To Shares Forfeited A/c			18,000
	To Calls-in-Arrears A/c (WN)			32,000
	(5,000 shares forfeited for non-payment of allotment and call money)
(ii)	Bank A/c Dr.		36,000
	To Share Capital A/c			30,000
	To Securities Premium A/c			6,000
	(3,000 shares re-issued @ ₹ 12 per share)
(iii)	Shares Forfeited A/c Dr.		10,800
	To Capital Reserve A/c			10,800
	(Gain on re-issue of forfeited shares transferred to capital reserve)

Working Note:

Calculation of Calls-in-Arrears from Rahul:

	₹
Allotment money due on 5,000 shares	25,000
Less: Excess Application Money already paid (1,000 × ₹ 3)	3,000
Unpaid Allotment Money	22,000
Add: Amount of First and Final Call Not Paid	10,000
Total Calls-in-Arrears	32,000