Question
'X Ltd.' invited applications for issuing 10,000 equity shares of Rs 100 each at a premium of `100 per share. The amount was payable as follows:
On application and allotment - Rs 100 per share (including Rs 50 premium)
On first and final call - The balance
The issue was fully subscribed. A shareholder holding 500 shares paid the full share money with an application. Another shareholder holding 200 shares failed to pay the first and final call money. His shares were forfeited. The forfeited shares were re-issued for Rs 19,000 as fully paid up.
Pass necessary journal entries for the above transactions in the books of the company
Solution
| In the Books of Y Ltd Journal |
||||
| Date | Particulars | L.F. |
Dr. Rs |
Cr. Rs |
|
Bank A/c Dr. To Equity Share Application A/c (Being application money received on 15,000 shares) |
30,000
|
30,000
|
||
|
Equity Share Application A/c Dr. To Equity Share Capital A/c (Being amount of application transferred to Share Capital) |
30,000
|
30,000
|
||
|
Equity Share Allotment A/c Dr. To Equity Share Capital A/c (Being amount due on share allotment) |
15,000
|
15,000
|
||
|
Bank A/c (15,000 – 2,000) Dr. To Equity Share Allotment A/c (Being amount received on share allotment) |
13,000
|
13,000
|
||
|
Equity Share First Call A/c Dr. To Equity Share Capital A/c (Being amount due on share first call) |
45,000
|
45,000
|
||
|
Bank A/c (45,000 – 9,000 – 6,000) Dr. To Equity Share First Call A/c (Being amount received on share first call except on 5,000 shares) |
30,000
|
30,000
|
||
|
Equity Share Capital A/c Dr. To Equity Share forfeiture A/c To Equity Share first, call A/c (Being 5,000 shares forfeited) |
45,000
|
13,000 17,000
|
||
|
Bank A/c Dr. To Equity Share Capital A/c To Securities Premium A/c (Being forfeited shares were reissued for 9; Rs 6 called – up) |
45,000
|
30,000 15,000
|
||
|
Equity Share forfeiture A/c Dr. To Capital Reserve A/c (Being excess amount on forfeiture is transferred to capital reserve) |
13,000
|
13,000
|
||
