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Journal Entries for Re-Issue of Shares

The amount re...

Question

The amount receivable on reissue of shares together with the amount forfeited, shall not, in any case be less than the original issue price of the shares.

A

Cant say.

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B

Partially correct.

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C

False

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D

True

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Solution

True. The amount receivable on reissue of shares together with the amount forfeited, shall not, in any case be less than the original issue price of the shares.

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Q. At the time of forfeiture of shares which were originally issued at a discount, the accounting entry will be
I. A Debit Share capital account with the called-up value of shares forfeited.
II. A Credit Share forfeiture account with the amount received on forfeited shares.
III. A Credit Discount on issue of shares with the amount of discount allowed on forfeited shares,
IV. A Credit Calls-in-arrears with the amount due but not paid on forfeited shares.

Q. Sea Ltd. issued 16,000 equity shares of ₹ 50 each at a premium of ₹ 10 per share payable on application ₹ 15, on allotment ₹ 30 (including premium), and balance on the first and final call. Applications were received for 24,500 shares, and allotment was made on a pro rata basis. Bimal, to whom 3,200 shares were allotted, failed to pay the amount due on the allotment. All his shares were forfeited after the first call was made. The forfeited shares were reissued to Dhriti at par. Calculate the amount received on reissue of forfeited shares.

[0.88 marks]

Q. If forfeited shares (which were originally issued at a discount) are reissued at a premium, the amount of such premium will be credited to ________________.

Can the company re-issue the forfeited shares at a price lower than the original issue price?

Q. If the forfeited shares are issued at a premium, the amount of the premium shall be credited to ___________.

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Journal Entries for Re-Issue of Shares

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