Question

Premium received on re-issue of forfeited share should be ____________.

• A. debit to share forfeited A/c
• B. credit to share forfeited A/c
• C. credit securities premium A/c
• D. none of these

Answer 1

Answer: (C)

credit securities premium A/c

In case of re-issue of of forfeited share on premium the entries would be as follows:

Bank A/c. Dr. (with re-issue price)

To Share Capital A/c. (with the amount called up)

To Securities premium A/c.(with premium amount)

As per the provisions of Companies Act 2013, the amount of premium on fresh issue after redemption, should be credited to securities premium A/c and face value to share capital account.