Question

Alfa Ltd. invited applications for issuing 75,000 equity shares of ₹ 10 each. The amount was payable as follows:

On application and allotment	$—$	₹ 4 per share ,
On first Call	$—$	₹ 3 per share,
On second and final Call	$—$	balance.

Applications for 1,00,000 shares were received. Shares were allotted to all the applicants on pro rata basis and excess money received with applications was transferred towards sums due on first call. Vibha who was allotted 750 shares failed to pay the first call . Her shares were immediately forfeited . Afterwards the second call was made. The amount due on second call was also received except on 1,000 shares applied by Monika . Her shares were also forfeited. All the forefited shares were reissued to Mohit for ₹9,000 as fully paid-up.
Pass necessary journal entries in the Books of Alfa Ltd . for the above transactions.

Answer 1

In the books of Alfa Ltd. Journal Entry
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs
	Bank A/c	Dr.		4,00,000
	To Equity Share Application and Allotment A/c				4,00,000
	(Application money received on 1,00,000 shares)
	Equity Share Application and Allotment A/c	Dr.		4,00,000
	To Equity Share Capital A/c				3,00,000
	To Equity Share First Call A/c				1,00,000
	(Application money transferred to share capital account and excess money is adjusted in first call account)
	Equity Share First Call A/c	Dr.		2,25,000
	To Equity Share Capital A/c				2,25,000
	(Amount due on first call)
	Bank A/c (2,25,000 – 1,00,000 – 1,250)	Dr.		1,23,750
	To Equity Share First Call A/c				1,23,750
	(Amount received on first call)
	Equity Share Capital A/c	Dr.		5,250
	To Equity Share Forfeiture A/c				4,000
	To Equity Share First Call A/c				1,250
	(Vibha’s shares were forfeited)
	Equity Share Second and Final Call A/c	Dr.		2,22,750
	To Equity Share Capital A/c				2,22,750
	(Amount due on second and final call after forfeiting Vibha’s shares)
	Bank A/c (2,22,750 – 2,250)	Dr.		2,20,500
	To Equity Share Second and Final Call A/c				2,20,500
	(Amount received on second and final call)
	Equity Share Capital A/c	Dr.		7,500
	To Equity Share Forfeiture A/c				5,250
	To Equity Share Second and Final Call A/c				2,250
	(Monika’s shares were forfeited)
	Bank A/c	Dr.		9,000
	Equity Share Forfeiture A/c	Dr.		6,000
	To Equity Share Capital A/c				15,000
	(Forfeited shares were reissued for Rs 9,000 as fully paid-up)
	Equity Share Forfeiture A/c	Dr.		3,250
	To Capital Reserve A/c				3,250
	(Excess amount on forfeiture is transferred to capital reserve)

Working Notes:

WN1: Calculation of Amount not received on First Call

WN2: Calculation of Amount not received on Second Call