Question

A company forfeited 100 shares of Rs 10 each, Rs 7.50 per share called up on which Rs 5 per share had been paid. Directors decided to re-issue all the forfeited shares to B as Rs 7.50 paid up for Rs 7 each. Pass the necessary Journal entries.

Answer 1

JOURNAL
$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Debit}& \text{Credit}\\ & & & \left(\text{Rs}\right)& \left(\text{Rs}\right)\\ & \text{Equity Share Capital A/c}\text{Dr}.& & 750& \\ & \text{To Calls-in-Arrears A/c}& & & 250\\ & \text{To Share Forfeiture A/c}& & & 500\\ & \underset{–}{\left(\text{Being 100 shares forfeited}\right)}& & & \\ & \text{Bank A/c}\text{Dr}.& & 700& \\ & \text{Share Forfeiture A/c}\text{Dr}.& & 50& \\ & \text{To Equity Share Capital A/c}& & & 750\\ & \left(\text{Being forfeited shares re-issued}\right)& & & \\ & \overline{\text{Share Forfeiture A/c}}\text{Dr}.& & 450& \\ & \text{To Capital Reserve A/c}& & & 450\\ & \left(\text{Being gain on re-issue transferred to Capital Reserve}\right)& & & \end{array}$