Question

Pass entries for forfeiture and re-issue in the following case.

Vikram 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. Only application money of ₹ 3 was paid by him. Out of these 3,000 shares were re-issued @ ₹ 12 per share as fully paid.

Vikram 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. Only application money of ₹ 3 was paid by him. Out of these 3,000 shares were re-issued @ ₹ 12 per share as fully paid.

Pass entries for forfeiture and reissue of shares.

Answer 1

Journal Entries in the Books of Vikram Ltd. Journal Entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Share Capital A/c   ...Dr.		50,000
	To Share Forfeited A/c			18,000
	To Calls in Arrears A/c			32,000
	(5,000 shares forfeited for non-payment of allotment and call money)
2.	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)
3.	Share Forfeited A/c   ...Dr.		10,800
	To Capital Reserve A/c			10,800
	(Gain on re-issue of forfeited shares transferred to capital reserve)