Page 340 - VIRANSH COACHING CLASSES

Solution :
Journal Entries

Date Particulars L.F. Debit ` Credit `
1. Equity Share Capital A/c ...................................Dr. 2,400
To Equity Share Allotment A/c 600
To Equity Share First Call A/c 600
To Discount on Issue of Shares A/c 300
To Share Forfeiture A/c 900
(Being forfeiture of 300 equity share due to non-
payment of Allotment money, first call money)

2. Equity Share Capital A/c ....................................Dr. 4,000
To Equity Share First Call A/c 800
To Equity Share Final Call A/c 800
To Discount on Issue of Shares A/c 400
To Share Forfeiture A/c 2,000
(Being forfeiture of 400 equity shares due to non-
payment of first call and final call money)

Working Note No. 1 -
Neeta

Capital = No. of Shares Called up value including discount
Allotment 300 × 8 = ` 2,400
A/c = 300 × 2 = ` 600
First call = 300 × 2 = ` 600
Discount = 300 × 1 = ` 300

Working Note No. 2 -
Sanjay
Discount = 400 × 1 = ` 400
First call = 400 × 2 = ` 800
Final call = 400 × 2 = ` 800
Capital = 400 × 10 = ` 4,000

8.3.3 Reissue of forfeited shares
The directors can re-issue the forfeited shares either at par, premium or at discount, usually re-issued
as fully paid and they are issued at a discount. However the amount of discount allowed on reissue
should not exceed the amount which has already been received (the forfeited amount) in respect
of these shares on their original issue and the same should be debited to Share Forfeiture Account.
In case of all the forfeited shares are re-issued balance of share forfeiture account is transferred to
Capital Reserve Account.

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