Question

Show the forfeiture and reissue entries under the following case:

Teer Ltd. forfeited 3,000 shares of ₹ 10 each for non-payment of final call of ₹ 2 per share. These shares were reissued for ₹ 10 each as fully paid-up.

Answer 1

Journal Entries
Date	Particulars	L.F.	Dr. (₹)	Cr. (₹)
1.	Share Capital A/c   ...Dr.		30,000
	To Shares Final Call A/c			6,000
	To Forfeited Shares A/c			24,000
	(3,000 shares forfeited for non-payment of Final Call of ₹ 2 per share)
2.	Bank A/c   ...Dr.		30,000
	To Share Capital A/c			30,000
	(3,000 forfeited shares reissued at ₹ 10 each as fully paid-up)
3.	Forfeited Shares A/c   ...Dr.		24,000
	To Capital Reserve A/c			24,000
	(Profit on reissue transferred to Capital Reserve)

Working Note:

3,000 shares of ₹ 10 each were forfeited for non-payment of Final Call of ₹ 2 per share.

Amount called-up:

3,000 × ₹ 10 = ₹ 30,000

Final Call unpaid:

3,000 × ₹ 2 = ₹ 6,000

Amount already received and forfeited:

3,000 × (₹ 10 − ₹ 2) = 3,000 × ₹ 8 = ₹ 24,000​

The shares were reissued at ₹ 10 each as fully paid-up:

3,000 × ₹ 10 = ₹ 30,000

Since there is no loss on reissue, the entire forfeited amount is transferred to Capital Reserve:

₹ 24,000