Question

Pass necessary journal entries for forfeiture and reissue of forfeited shares in the following cases:

Deepak Ltd. forfeited 800 shares of ₹ 10 each, ₹ 8 per share called up, for non-payment of first call of ₹ 3 per share. All the forfeited shares were reissued for ₹ 12 per share fully paid. 

Answer 1

In the Books of Deepak Ltd Journal
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
	Share Capital A/c (800 × ₹ 8)      ...Dr.		6,400
	To Share First Call A/c (800 × ₹ 3)			2,400
	To Share Forfeiture A/c			4,000
	(Being 8,00 shares forfeited for non-payment of first call money)
	Bank A/c (800 × ₹ 12)     ...Dr.		9,600
	To Share Capital A/c (800 × ₹ 10)			8,000
	To Securities Premium Reserve A/c ( 800 × ₹ 2)			1,600
	(Being 800 forfeited shares reissued at ₹ 12 per share fully paid)
	Share Forfeiture A/c    ...Dr.		4,000
	To Capital Reserve A/c			4,000
	(Being profit on reissue of 800 forfeited shares transferred to Capital Reserve Account)