Question

Classic Ltd. invited applications for 1,00,000 shares of ₹ 10 each at premium of ₹ 5 each payable ₹ 10 on application and balance as allotment money. Ankur holding 1,000 shares did not pay the allotment money and his shares were forfeited.

Pass the necessary Journal entries.

Answer 1

Journal Entries
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
1.	Bank A/c ...Dr.		10,00,000
	To Shares Application A/c			10,00,000
	(Being application money received @ ₹ 10 per share)
2.	Shares Application A/c ...Dr.		10,00,000
	To Share Capital A/c			10,00,000
	(Being shares allotted and application money transferred)
3.	Shares Allotment A/c ...Dr.		5,00,000
	To Securities Premium A/c			5,00,000
	(Being Securities Premium due)
4.	Bank A/c ...Dr.		4,95,000
	Calls-in-Arrears A/c ...Dr.		5,000
	To Shares Allotment A/c			5,00,000
	(Being shares allotment money received)
5.	Share Capital A/c ...Dr.		10,000
	Securities Premium A/c ...Dr.		5,000
	To Forfeited Shares A/c			10,000
	To Calls-in-Arrears A/c			5,000
	(Being 1,000 shares forfeited)