Question

The Directors of Khyati Ltd. resolved on 1st May, 2025 that 2,000 Equity Shares of ₹ 10 each, ₹ 7.50 paid be forfeited for non-payment of final call of ₹ 2.50. On 10th June, 2025, 1,800 of these shares were reissued for ₹ 6 per share. Give necessary Journal entries.

Answer 1

Journal Entries in the Books of Khyati Ltd.
Date	Particulars	Dr. (₹)	Cr. (₹)
2025
1 May	Share Capital A/c   ...Dr.	20,000
	To Shares Final Call A/c		5,000
	To Share Forfeiture A/c		15,000
	(2,000 shares forfeited for non-payment of Final Call of ₹ 2.50 per share)
10 June	Bank A/c   ...Dr.	10,800
	Share Forfeiture A/c Dr.	7,200
	To Share Capital A/c		18,000
	(1,800 forfeited shares reissued @ ₹ 6 per share as fully paid-up)
10 June	Share Forfeiture A/c   ...Dr.	6,300
	To Capital Reserve A/c		6,300
	(Gain on reissue transferred to Capital Reserve)

Working Note:

Number of shares forfeited: 2,000

Face value per share: ₹ 10

Amount paid per share: ₹ 7.50

Final Call unpaid: ₹ 2.50 per share

Amount forfeited:

2,000 × ₹ 7.50 = ₹ 15,000

Final Call unpaid:

2,000 × ₹ 2.50 = ₹ 5,000

Reissue of 1,800 Shares:

Cash received:

1,800 × ₹ 6 = ₹ 10,800

Share Capital credited:

1,800 × ₹ 10 = ₹ 18,000

Discount on reissue:

₹ 18,000 − ₹ 10,800 = ₹ 7,200

Forfeited amount relating to 1,800 shares:

`15,000 xx (1,800)/(2,000) = 13,500`

Capital Reserve:

₹ 13,500 − ₹ 7,200 = ₹ 6,300​