Arjun was holding 1,000 shares ₹ 10 each of Vanavill Electronics Ltd, issued at par. He paid ₹ 3 on the application, ₹ 4 on the allotment but could not pay the first and final call of ₹ 3. - Accountancy

Question

Arjun was holding 1,000 shares ₹ 10 each of Vanavill Electronics Ltd, issued at par. He paid ₹ 3 on the application, ₹ 4 on the allotment but could not pay the first and final call of ₹ 3. The directors forfeited the shares for nonpayment of call money. Give Journal entry for forfeiture of shares.

Journal Entry

Solution

Date	Particulars	L.F.	Debit Rs.	Credit Rs.
(1)	Share capital A/c (1,000 × Rs. 10) Dr. To share I and final call A/c (1,000 × Rs. 3) To Forfeited shares A/c (1,000 × Rs. 7) [Shares forfeited for non payment of call money]		10,000	3,000 7,000