Question

Pass journal entries for the forfeiture and re-issue in the following case:

X Ltd. forfeited 700 shares of Ashok of ₹10 each ₹8 called-up, on which he had paid ₹5 per share. Out of these, 500 shares were re-issued for ₹9 per share as fully paid.

Answer 1

Date	Particulars	L.F.	Debit (₹)	Credit (₹)
1.	Share Capital A/c (700 × ₹8)     ...Dr.		5,600
	To Calls in Arrears A/c (700 × ₹3)			2,100
	To Share Forfeiture A/c (700 × ₹5)			3,500
	(Being 700 shares forfeited for non-payment of ₹3 per share)
2.	Bank A/c (500 × ₹9)     ...Dr.		4,500
	Share Forfeiture A/c (500 × ₹1)     ...Dr.		500
	To Share Capital A/c (500 × ₹10)			5,000
	(Being 500 shares reissued at ₹9 each as fully paid)
3	Share Forfeiture A/c     ...Dr.		2,000
	To Capital Reserve A/c     ...Dr.		2,000
	(Being profit on reissue of 500 shares transferred to Capital Reserve)