Question

Nitro Paints Ltd. invited applications for issuing 1,60,000 equity shares of ₹ 10 each at a premium of ₹ 3 per share. The amount was payable as follows:

On application	$—$	₹ 6 per share(including premium ₹1);
On allotment	$—$	₹ 3 per share(including premium ₹ 1); and
The balance	$—$	on First and Final call.

Applications for 1,80,000 shares were received .Applications for 10,000 shares were rejected and pro rata allotment was made to the remaining applicants.Over payment received on application was adjusted towards sums due on allotment . All calls were made and were duly received except allotment and final call from Aditya who was allotted 3,200 shares. His shares were forfeited . Half of the forfeited shares were reissued for ₹ 43,000 as fully paid-up .
Pass necessary journal entries for the above transactions in the books of Nitro Paints Ltd.

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
	Bank A/c (1,80,000 × 6)	Dr.		10,80,000
	To Equity Share Application A/c				10,80,000
	(Application money received)
	Equity Share Application A/c	Dr.		10,80,000
	To Equity Share Capital A/c(1,60,000 × 5)				8,00,000
	To Securities Premium Reserve A/c (1,60,000 × 1)				1,60,000
	To Share Allotment A/c(10,000 × 6)				60,000
	To Bank A/c (10,000 × 6)				60,000
	(Application money transferred)
	Equity Share Allotment A/c (1,60,000 × 3)	Dr.		4,80,000
	To Equity Share Capital A/c(1,60,000 × 2)				3,20,000
	To Securities Premium Reserve A/c(1,60,000 × 1)				1,60,000
	(Allotment money due)
	Bank A/c (4,80,000 ─ 60,000 ─ 8,400)	Dr.		4,11,600
	To Equity Share Allotment A/c				4,11,600
	(Allotment money received)
	Equity Share First Call A/c (1,60,000 × 4)	Dr.		6,40,000
	To Equity Share Capital A/c				4,80,000
	To Securities Premium Reserve A/c				1,60,000
	(Call money due)
	Bank A/c	Dr.		6,27,200
	To Equity Share First Call A/c				6,27,200
	(Call money received)
	Equity Share Capital A/c (3,200 × 10)	Dr.		32,000
	Securities Premium Reserve A/c (3,200 × 2)	Dr.		6,400
	To Equity Share Allotment A/c				8,400
	To Equity Share First & Final Call A/c				12,800
	To Equity Share Forfeiture A/c				17,200
	(3,200 shares forfeited)
	Bank A/c	Dr.		43,000
	To Equity Share Capital A/c				16,000
	To Securities Premium A/c				27,000
	(1,600 shares re–issued)
	Equity Share Forfeiture A/c	Dr.		8,600
	To Capital Reserve A/c				8,600
	(Profit on re-issue transferred)

Working Notes:
$\mathrm{Shares}\mathrm{Applied}\mathrm{by}\mathrm{Aditya}=\frac{1,70,000}{1,60,000}\times 3,200=3,400$

Amount unpaid by Aditya on Allotment
Application money received	20,400
Less: Transferred to Share Capital	(19,200)
Excess received on Application	1,200
Allotment money due	9,600
Less: Excess adjustment	(1,200)
Amount unpaid by Aditya	8,400