Question

VXN Ltd. invited applications for issuing 50,000 equity shares of  ₹  10 each at a premium of  ₹  8 per share . The amount was payable as follows:
 

On Application	------	₹ 4 per share (Including  ₹ 2 premium);
On Allotment	------	₹  6 per share (Including  ₹  3 premium);
On First Call	-----	₹  5 per share (Including  ₹  1  premium); and
On Second and Final Call	-----	Balance Amount

The issue was fully subscribed . Gopal, a shareholder holding 200 shares, did not pay the allotment money and Madhav, a holder of 400 shares, paid his entire share money along with the allotment money. Gopal's shares were immediately forfeited after allotment . Afterwards, the first call was made. Krishna, a holder of 100 shares , failed to pay the first call money and Girdhar, a holder of 300 shares, paid the second call money also along with the first call . Krishna's shares were forfeited immediately after the first call. Second and final call was made afterwards and was duly received . All the forfeited shares were reissued at  ₹  9 per share fully paid-up.
Pass necessary journal entries for the above transactions in the books of the company.

Answer 1

Journal

Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
	Bank A/c (50,000 × 4)	Dr.		2,00,000
	To Equity Share Application A/c				2,00,000
	(Application money received on 50,000 shares)
	Equity Share Application A/c	Dr.		2,00,000
	To Equity Share Capital A/c				1,00,000
	To Securities Premium Reserve A/c				1,00,000
	(Application money transferred to Share Capital)
	Equity Share Allotment A/c (50,000 × 6)	Dr.		3,00,000
	To Equity Share Capital A/c				1,50,000
	To Securities Premium Reserve A/c				1,50,000
	(Allotment money due on 50,000 shares)
	Bank A/c (49,800 × 6) + (400 × 8)	Dr.		3,02,000
	To Equity Share Allotment A/c (49,800 × 5)				2,98,800
	To Calls–in–Advance A/c (400 × 8)				3,200
	(Allotment money received)
	Equity Share Capital A/c (200 × 5)	Dr.		1,000
	Securities Premium Reserve A/c (200 × 3)	Dr.		600
	To Equity Share Allotment A/c (200 × 6)				1,200
	To Equity Share Forfeiture A/c (200 × 2)				400
	(200 shares forfeited for non–payment of allotment money including premium of Rs 3)
	Equity Share First Call A/c (49,800 × 5)	Dr.		2,49,000
	To Equity Share Capital A/c				1,99,200
	To Securities Premium Reserve A/c				49,800
	(Call money due on 49,800 shares)
	Bank A/c (49,700 × 5) − 2,000 + 900	Dr.		2,47,400
	Calls–in–Advance A/c (400 × 5)	Dr.		2,000
	To Calls–in–Advance A/c (300 × 3)				900
	To Equity Share First Call A/c				2,48,500
	(Call money received)
	Equity Share Capital A/c (100 × 9)	Dr.		900
	Securities Premium Reserve A/c (100 × 1)			100
	To Equity Share First Call A/c (100 × 5)				500
	To Equity Share Forfeiture A/c (100 × 5)				500
	(100 shares forfeited for non-payment of call money)
	Equity Share Second and Final Call A/c (49,700 × 3)	Dr.		1,49,100
	To Equity Share Capital A/c				49,700
	To Securities Premium A/c				99,400
	(Call money due on 49,700 shares)
	Bank A/c	Dr.		1,47,000
	Calls-in-Advance A/c (1,200 + 900)			2,100
	To Equity Share Second and Final Call A/c				1,49,100
	(Call money received on shares)
	Bank A/c (300 × 9)	Dr.		2,700
	Equity Share Forfeiture A/c			300
	To Equity Share Capital A/c				3,000
	(300 shares re–issued at Rs 9 per share)
	Equity Share Forfeiture A/c (400 + 500 − 300)	Dr.		600
	To Capital Reserve A/c				600
	(Profit on re-issue transferred to Capital Reserve)