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Pass Necessary Journal Entries in the Books of the Company for the Following Transactions: - Accountancy

Journal Entry

Pass necessary journal entries in the books of the company for the following transactions:
Vishesh Ltd. forfeited 1,000 Equity Shares of ₹ 10 each issued at a premium of ₹ 2 per share for non-payment of allotment money of ₹ 5 per share including premium. The final call of ₹ 2 per share was not yet called on these shares. Of the forfeited shares 800 shares were reissued at ₹ 12 per share as fully paid-up.
The remaining shares were reissued at ₹ 11 per share fully paid-up.

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Solution

Journal
In the books of Vishesh Ltd.

Date

Particulars

L.F.

Debit

Amount

Rs

Credit Amount

Rs

 

Equity Share Capital A/c (8×1,000)

Dr.

 

8,000

 

 

Securities Premium A/c (2×1,000)

Dr.

 

2,000

 

 

To Share Forfeiture A/c

 

 

 

5,000

 

    To Calls-in-Arrears

 

 

 

5,000

 

(1,000 shares of Rs 10 each issued at premium of Rs 2 forfeited for non payment of allotment money of Rs 5 including premium, final call of Rs 2 not yet made)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c (12×800)

Dr.

 

9,600

 

 

To Share Capital A/c

 

 

 

8,000

 

   To Securities Premium A/c

 

 

 

1,600

 

(800 shares reissued at Rs 12 fully paid up)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c (11×200)

Dr.

 

2,200

 

 

To Share Capital A/c

 

 

 

2,000

 

   To Securities Premium A/c

 

 

 

200

 

(200 shares reissued at Rs 11 fully paid up)

 

 

 

 

 

 

 

 

 

 

 

Share Forfeiture A/c

Dr.

 

5,000

 

 

To Capital Reserve A/c

 

 

 

5,000

 

(Profit on reissue transferred to capital reserve)

 

 

 

 

Concept: Accounting Treatment of Forfeiture and Re-issue of Share
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APPEARS IN

TS Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 2
Chapter 1 Accounting for Share Capital
Exercise | Q 66 | Page 123
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