Question

The Directors of a company forfeited 300 shares of ₹ 10 each issued at a premium of ₹ 3 per share , for the non-payment of the first call money of ₹ 2 per share . The final call of ₹ 2 per share has not been made. Half the forfeited shares were reissued at ₹ 1,500 as fully paid-up. Record the journal  entries for the forfeiture and reissue of shares.

Answer 1

Journal Entries

Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Share Capital A/c (300 × 8)	Dr.		2,400
	To Share Forfeiture A/c (300 × 6)				1,800
	To Calls-In-Arrears (300 × 2)				600
	(300 shares of Rs 10 each on which  Rs 8 had called, forfeited for non-payment Rs 2 per share)
	Bank A/c	Dr.		1,500
	To Share Capital A/c				1,500
	(150 shares of Rs 10 each re-issued for the sum of Rs 1,500)
	Share Forfeiture A/c	Dr.		900
	To Capital Reserve A/c				900
	(Balance in Share Forfeiture Account of 150 re-issued shares, transferred to Capital Reserve)

Working Notes

Share Forfeiture of Re-issued Shares

Share Forfeiture (at the time of forfeiture)	Cr.	6
Less: Share Forfeiture (at the time of re-issue)	Dr.	NIL
Balance in Share Forfeiture after re-issue	Cr.	6	per share

Capital Reserve = Balance in Share Forfeiture after reissue (per share) × Number of Shares Reissued

= Rs 6 × 150

= Rs 900