Question

XL Ltd. invited applications for issuing 1,00,000 equity shares of Rs 10 each at par. The amount was payable as follows:

On Application Rs 3 per share.
On Allotment Rs 4 per share.
On First and Final Call Rs 3 per share.

The issue was over-subscribed by three times. Applications for 20% shares were rejected and the money refunded. Allotment was made to the remaining applicants as follows: 

CategoryNo. of Shares AppliedNo. of Shares Allotted 

I                       1,60,000                     80,000 

ii                       80,000                       20,000 

Excess money received with applications was adjusted towards sums due on allotment and first and final call. All calls were made and were duly received except the final call by a shareholder belonging to Category I who has applied for 320 shares. His shares were forfeited. The forfeited shares were re-issued at Rs 15 per share fully up.

Pass necessary Journal entries for the above transactions in the book of XL Ltd. open calls in-arrears and calls in advance account whenever required. 

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bank A/c (3,00,000 × 3)	Dr.		9,00,000
	To Share Application A/c				9,00,000
	(Received application money on 3,00,000 shares)
	Share Application A/c	Dr.		9,00,000
	To Share Capital A/c				3,00,000
	To Share Allotment A/c (2,40,000 + 80,000)				3,20,000
	To Calls-in-Advance A/c				60,000
	To Bank A/c (60,000 × 3) + 40,000)				2,20,000
	(Transfer of application money to Share Capital)
	Share Allotment A/c (1,00,000 × 4)			4,00,000
	To Share Capital A/c				4,00,000
	(Allotment due on 1,00,000 shares )
	Bank A/c	Dr.		80,000
	To Share Allotment A/c (4,00,000 − 3,20,000)				80,000
	(Allotment money received)
	Share First and Final Call A/c (1,00,000 × 3)	Dr.		3,00,000
	To Share Capital A/c				3,00,000
	(Call money due on 1,00,000 shares)
	Bank A/c	Dr.		2,39,520
	Calls-in-Advance A/c	Dr.		60,000
	Calls-in-Arrears A/c (160 × 3)			480
	To Share First and Final Call A/c				3,00,000
	(Received call money)
	Share Capital A/c (160 × 10)	Dr.		1,600
	To Share First Call A/c (160 × 3)				480
	To Share Forfeiture A/c (160 × 7)				1,120
	(Forfeiture of 300 shares for non-payment of call money)
	Bank A/c (160 × 15)	Dr.		2,400
	To Share Capital A/c				1,600
	To Security Premium Reserve A/c				800
	(Reissue of 160 shares at Rs 15 per share)
	Share Forfeiture A/c	Dr.		1,120
	To Capital Reserve A/c				1,120
	(Profit on re-issue transferred to Capital Reserve Account)