Question

BBG Ltd. invited applications for issuing 2,00,000 equity shares of Rs 10 each at a premium of Rs 10 per share. The amount was payable as follows:  

On Application − Rs 4 per share (including Rs 2 premium)
On Allotment − Rs 5 per share (including Rs 2 premium)
On First call − Rs 5 per share (including Rs 3 premium)
On Second and final call − Balance amount 

The issue was fully subscribed. Raghu, a shareholder holding 1000 shares, failed to pay the allotment money and Rahim, another shareholder holding 1500 shares, paid his entire share money along with allotment. Raghu's shares were forfeited immediately after allotment. Afterwards, the first call was made Deenanath, a shareholder holding 500 shares, failed to pay the first call money and Dayal, a shareholder holding 600 shares, paid his second call money along with the first call. Deenanath's shares were forfeited immediately after the first call. Later on the second call was made which was duly received.

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

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (Rs)	Credit Amount (Rs)
	Bank A/c (2,00,000 × 4)	Dr.		8,00,000
	To Equity Share Application A/c				8,00,000
	(Received application money on 2,00,000 shares)
	Equity Share Application A/c	Dr.		8,00,000
	To Equity Share Capital A/c				4,00,000
	To Securities Premium Reserve A/c				4,00,000
	(Transfer of application money to Share Capital)
	Equity Share Allotment A/c (2,00,000 × 5)	Dr.		10,00,000
	To Equity Share Capital A/c				6,00,000
	To Securities Premium Reserve A/c				4,00,000
	(Allotment due on 2,00,000 shares )
	Bank A/c (1,99,000 × 5) + (1,500 × 11)	Dr.		10,11,500
	To Equity Share Allotment A/c (1,99,000 ×5)				9,95,000
	To Calls-in-Advance A/c (1,500 × 11)				16,500
	(Allotment money received)
	Equity Share Capital A/c (1,000 × 5)	Dr.		5,000
	Securities Premium Reserve A/c (1,000 × 2)	Dr.		2,000
	To Equity Share Allotment A/c (1,000 × 5)				5,000
	To Equity Share Forfeiture A/c (1,000 × 2)				2,000
	(Forfeiture of 1,000 shares for non-payment of allotment money including premium of Rs 2)
	Equity Share First Call A/c (1,99,000 × 5)	Dr.		9,95,000
	To Equity Share Capital A/c				3,98,000
	To Securities Premium Reserve A/c				5,97,000
	(Call money due on 1,99,000 shares)
	Bank A/c (1,98,500 × 5) − 7,500 + 3,600	Dr.		9,88,600
	Calls-in-Advance A/c (1,500 × 5)	Dr.		7,500
	To Calls-in-Advance A/c (600 × 6)				3,600
	To Equity Share First Call A/c				9,92,500
	(Received call money)
	Equity Share Capital A/c (500 × 7)	Dr.		3,500
	Securities Premium Reserve A/c (500 × 3)			1,500
	To Equity Share First Call A/c (500 × 5)				2,500
	To Equity Share Forfeiture A/c (500 × 5)				2,500
	(Forfeiture of 500 shares for non-payment of call money)
	Equity Share Second and Final Call A/c (1,98,500 × 6)	Dr.		11,91,000
	To Equity Share Capital A/c				5,95,500
	To Securities Premium A/c				5,95,500
	(Call money due on 1,98,500 shares)
	Bank A/c	Dr.		11,78,400
	Calls-in-Advance A/c (9,000 + 3,600)			12,600
	To Equity Share Second and Final Call A/c				11,91,000
	(Received call money on shares)