Question

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

Moksh Ltd. forfeited 5,000 shares of ₹ 10 each on which the first call of ₹ 3 per share was not received. The second and final call of ₹ 2 per share has not yet been called. Out of these, 2,000 shares were issued to Geeta as ₹ 8 paid up for ₹ 7 per share.

Answer 1

Journal Entries in the Books of Moksh Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
(i)	Share Capital A/c   ...Dr.		40,000	-
	To Share First Call A/c		-	15,000
	To Forfeited Shares A/c		-	25,000
	(Being 5,000 shares forfeited for non-payment of the first call of ₹ 3, with ₹8 called up per share)
(ii)	Bank A/c   ...Dr.		14,000	-
	Forfeited Shares A/c  ..Dr.		2,000	-
	To Share Capital A/c			16,000
	(Being 2,000 forfeited shares reissued at ₹ 7 per share as ₹ 8 paid up)
(iii)	Forfeited Shares A/c   ..Dr.		8,000	-
	To Capital Reserve A/c		-	8,000
	(Being a profit on the reissue of 2,000 shares transferred to the Capital Reserve)