Question

'Wellness Ltd.' invited applications for issuing 40,000 equity shares of Rs 10 each at a discount of 10%.

The amount was payable as follows :
On application and allotment - Rs 4 per share
On the first call - Rs 3 per share
On second and final call - the balance

Applications for 39,000 shares were received and the allotment was made to all the applicants.
The payment was received as per the following details:
On 30,000 shares - Full amount
On 6,000 shares - Rs 7 per share
On 3,000 shares - Rs  4 per share

The Directors forfeited those shares on which less than Rs 7 per share were received. The forfeited shares were re-issued at `8 per share as fully paid up.
Pass necessary Journal Entries in the books of the company for the above transactions.

Answer 1

In the books of Wellness Ltd Journal Entry
Date	Particulars	L.F.	Dr. Rs	Cr. Rs
	Bank A/c    Dr.       To Equity Share Application and Allotment A/c (Being amount received on an application for Rs 39,000)		1,56,000	1,56,000
	Equity Share Application and Allotment A/c  Dr.     To Equity Share Capital A/c (Being amount of application transferred to Share Capital)		1,56,000	1,56,000
	Equity Share First Call A/c  Dr. Discount on Issue of Shares A/c    To Equity Share Capital A/c (Being amount due on the first call)		1,17,000 39,000	1,56,000
	Bank A/c (1,17,000 – 9,000)   Dr.   To Equity Share First Call A/c (Being amount received on the first call except on 3,000 shares)		1,08,000	1,08,000
	Equity Share Second and Final Call A/c   Dr.    To Equity Share Capital A/c   (Being amount due on second and final call)		78,000	78,000
	Bank A/c (78,000 – 18,000)   Dr.    To Equity Share Second and Final Call A/c (Being amount received on second and final call)		60,000	60,000
	Equity Share Capital A/c  Dr.    To Discount on Issue of Shares A/c    To Equity Share Forfeiture A/c    To Equity Share First Call A/c    To Equity Share Second and Final Call A/c (Being 3,000 shares were forfeited)		30,000	3,000 12,000 9,000 6,000
	Equity Share Forfeiture A/c   Dr.    To Capital Reserve A/c (Being excess amount on forfeiture is transferred to capital reserve)		9,000	9,000