Question

On 1st May, 2026, Moneyplus Ltd. forfeited 200 shares of ₹ 20 each, ₹ 15 per share called-up, on which ₹ 10 per share has been paid by A, the amount of the first call of ₹ 5 per share being unpaid. Ten days later, the Directors reissued the forfeited shares to B credited as ₹ 15 per share paid-up, for a payment of ₹ 10 per share.

Give Journal entries in the company's books to record the forfeited shares and their reissue.

Answer 1

Journal Entries in the Books of Moneyplus Ltd.
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
2026
1 May	Share Capital A/c   ...Dr.		3,000
	To Shares First Call A/c			1,000
	To Share Forfeiture A/c			2,000
	(200 shares forfeited for non-payment of First Call of ₹ 5 per share)
11 May	Bank A/c   ...Dr.		2,000
	Share Forfeiture A/c Dr.		1,000
	To Share Capital A/c			3,000
	(200 forfeited shares reissued for ₹ 10 per share as ₹ 15 paid-up)
11 May	Share Forfeiture A/c   ...Dr.		1,000
	To Capital Reserve A/c			1,000
	(Gain on reissue transferred to Capital Reserve)

Working Note:

Number of shares forfeited: 200

Called-up value per share: ₹ 15

Amount paid per share: ₹ 10

First Call unpaid per share: ₹ 5

Amount credited to Share Forfeiture A/c:

200 × ₹ 10 = ₹ 2,000

Reissue:

Shares were reissued as ₹ 15 paid-up for ₹ 10 per share.

Cash received:

200 × ₹ 10 = ₹ 2,000

Share Capital credited:

200 × ₹ 15 = ₹ 3,000

Discount on reissue:

₹ 3,000 − ₹ 2,000 = ₹ 1,000

Capital Reserve:

₹ 2,000 − ₹ 1,000 = ₹ 1,000