Question

Y Ltd. forfeited 2,000 shares of ₹10 each issued at 20% premium (to be paid at the time of allotment) on which allotment money of ₹4 (including premium) and first call money of ₹3 was not received; the final call money of ₹2 is not yet called. 1,500 of these shares were re-issued as fully paid for ₹7 per share. Journalise.

Answer 1

Journal entries In the boos of Y Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Share Capital A/c (₹8 × 2,000)     ...Dr.		16,000
	Securities Premium A/c (₹2 × 2,000)     ...Dr.		4,000
	To Share Allotment A/c (₹4 × 2,000)			8,000
	To Share First Call A/c (₹3 × 2,000)			6,000
	To Share Forfeiture A/c			6,000
	(Being 2,000 shares forfeited for non-payment of allotment and first call)
2.	Bank A/c (₹7 × 1,500)     ...Dr.		10,500
	Share Forfeiture A/c (₹3 × 1,500)     ...Dr.		4,500
	To Share Capital A/c (₹10 × 1,500)			15,000
	(Being 1,500 shares reissued at ₹7 fully paid, ₹3 discount adjusted from forfeiture)

Working Notes:

1) 

	Amount (₹)
Application	₹3
Allotment	₹4 (₹2 capital + ₹2 premium)
First Call	₹3
Final Call	Not yet called
Total Called-up	₹3 + ₹2 + ₹3 = ₹8

2)

• 1,500 shares reissued for ₹7 (fully paid up i.e., ₹10)

• Discount allowed = ₹3 per share

• Total discount = ₹3 × 1,500 = ₹4,500

• To be adjusted from Share Forfeiture Account

• Balance in Share Forfeiture after adjusting discount = ₹0