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Question - Accounting Treatment of Forfeiture and Re-issue of Share

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KS Ltd invited application for issuing 1, 60,000 equity shares of Rs.10 each at a premium of 6 per share. The amount was payable as follows;

On Application Rs.4 per share (including premium Rs.1 per share)

On Allotment Rs.6 per share (including premium Rs.3 per share)

On First and Final Call – Balance

Application for 3, 20,000 shares were received. Applications for 80,000 share were rejected and application money refunded. Shares were allotted on pro-rata basis to the remaining applicants. Excess money received with application was adjusted towards surns due on allotment. Jain holding 800 shares failed to pay the allotment money his shares were forfeited immediately after allotment. Afterwards the final call was made. Gupta who has applied for 1200 shares failed to pay the final call. These shares were forfeited. Out of the forfeited shares 1000 shares were re-issued at 8 per share fully paid up. The re-issued shares included all the forfeited shares of Jain

Pass necessary journal entries for the above transactions in the books of KS Ltd.

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