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Issued at a Discount and Redeemed at Premium

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Question

The discount on re-issue of forfeited shares is debited to the ________ A/c.

A

Share capital

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B

Shares forfeited

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C

Bank

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D

Discount on issue of shares

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Solution

The correct option is B Shares forfeited
When the forfeited shares are re issued at discount, accounting entry will be:

Bank Account Dr. (with the amount received on re issue)
Share Forfeited A/c Dr. (with the amount of discount)
To Share Capital A/c (with the amount of paid up amount)

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