Question

AXN Ltd. invited applications for issuing 1,00,000 equity shares of ₹10 each at a premium of ₹6 per share. The amount was payable as follows:

On Application	₹4 per share (including ₹2 premium)
On Allotment	₹5 per share (including ₹2 premium)
On First Call	₹4 per share (including ₹2 premium)
On Second and Final Call	Balance Amount.

The issue was fully subscribed.
Kumar, the holder of 400 shaes did not pay the allotment money and Ravi the holder of 1,000 shares paid his entire share money alongwith allotment money. Kumar's shares were forfeited immediately after allotment. Afterwards first call was made. Gupta, a holder of 300 shares failed to pay the first call money and Gopal a holder of 600 shares paid the second call money also alongwith first call. Gupta's shares were forfeited immediately after the first call. Second and final call was made afterwards. The whole amount due on second call was received.
All the forfeited shares were re-issued at ₹9 per share fully paid up.
Pass necessary Journal Entries for the above transactions in the books of the company.

Answer 1

Journal entries In the books of AXN Ltd.
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Bank A/c     ...Dr.		4,00,000
	To Share Application A/c			4,00,000
	(Being application money received @ ₹4 per share on 1,00,000 shares)
2.	Share Application A/c     ...Dr.		4,00,000
	To Share Capital A/c			2,00,000
	To Securities Premium A/c			2,00,000
	(Being application money transferred to capital and premium)
3.	Share Allotment A/c     ...Dr.		5,00,000
	To Share Capital A/c			3,00,000
	To Securities Premium A/c			2,00,000
	(Being allotment money due @ ₹5 including ₹2 premium)
4.	Bank A/c     ...Dr.		5,01,600
	Calls in Advance A/c (Ravi: 1,000 × ₹7)     ...Dr.		7,000
	To Share Allotment A/c			5,00,000
	To Calls in Advance A/c (Gopal: 600 × ₹3)			1,600
	(Being allotment money received incl. advance by Ravi and Gopal)
5.	Share Allotment A/c     ...Dr.		2,000
	To Share Capital A/c			1,200
	To Securities Premium A/c			800
	(Being forfeiture of 400 shares of Kumar for non-payment of allotment)
6.	Share First Call A/c     ...Dr.		4,00,000
	To Share Capital A/c			2,00,000
	To Securities Premium A/c			2,00,000
	(Being first call made @ ₹4 per share including ₹2 premium)
7.	Bank A/c     ...Dr.		3,95,800
	Calls in Advance A/c (Ravi 1,000 × ₹3)     ...Dr.		3,000
	To Share First Call A/c			4,00,000
	(Being first call money received; Ravi paid earlier)
8.	Share Capital A/c     ...Dr.		1,800
	Securities Premium A/c     ...Dr.		600
	To Share First Call A/c			1,200
	To Share Forfeiture A/c			1,200
	(Being forfeiture of 300 shares of Gupta for non-payment of 1st call)
9.	Share Second & Final Call A/c     ...Dr.		3,00,000
	To Share Capital A/c			3,00,000
	(Being second and final call of ₹3 made)
10.	Bank A/c     ...Dr.		3,00,000
	To Share Second & Final Call A/c			3,00,000
	(Being second and final call money received in full)
11.	Bank A/c     ...Dr.		6,300
	Share Forfeiture A/c     ...Dr.		700
	To Share Capital A/c			7,000
	(Being 700 forfeited shares reissued at ₹9 per share fully paid)
12.	Share Forfeiture A/c     ...Dr.		1,600
	To Capital Reserve A/c			1,600
	(Being profit on reissue of forfeited shares transferred to Capital Reserve)