When shares are issued at a premium and the amount is already received by company. Later on, when such shares are forfeited.

Premium A/c should be debited

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Premium A/c should be credited

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Premium A/c is not affected

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None of these

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Solution

The correct option is C Premium A/c is not affected
When the shares are issued at premium and the company has received that premium at the time of forfeiture the Premium A/c remains unchanged.
This all is because the company cannot demand the premium again on forfeiture of shares even when they have received the amount due on premium.

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