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'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 Pass Necessary Journal Entries for the Above Transactions in the Books of the Company - CBSE (Arts) Class 12 - Accountancy

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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

 

 

  Is there an error in this question or solution?

APPEARS IN

Solution '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 Pass Necessary Journal Entries for the Above Transactions in the Books of the Company Concept: Accounting Treatment of Forfeiture and Re-issue of Share.
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