Question

Show the forfeiture and reissue entries under the following case:

KBC Ltd. forfeited 300 shares of ₹ 10 each, ₹ 8 called-up held by Amit for non-payment of second call money of ₹ 3 per share. These shares were reissued to Zoly for ₹ 10 per share as fully paid-up.

Answer 1

Journal Entries
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
1.	Share Capital A/c   ...Dr.		2,400
	To Shares Second Call A/c			900
	To Share Forfeiture A/c			1,500
	(300 shares forfeited for non-payment of Second Call of ₹ 3 per share)
2.	Bank A/c   ...Dr.		3,000
	To Share Capital A/c			3,000
	(300 forfeited shares reissued @ ₹ 10 per share as fully paid-up)
3.	Share Forfeiture A/c   ...Dr.		1,500
	To Capital Reserve A/c			1,500
	(Gain on reissue transferred to Capital Reserve)

Working Note:

300 shares of ₹ 10 each, ₹ 8 called-up.

Second Call unpaid = ₹ 3 per share.

Amount received per share:

₹ 8 − ₹ 3 = ₹ 5

Amount forfeited:

300 × ₹ 5 = ₹ 1,500

Shares were reissued @ ₹ 10 per share as fully paid-up. Since there is no discount on reissue, entire forfeited amount is transferred to Capital Reserve.

Capital Reserve = ₹ 1,500​